Ad market down until 2011, ZenithOptimedia predicts
Advertising spend in 2009 is set to be 6.8% down on last year, with the market not expected to recover until 2011, according to a new forecast by ZenithOptimedia.
The Publicis-owned media agency predicted that $11.29bn will be spent on media in Australia in 2009, down from the $12.13bn in 2008. The first half of the year will be 15% down on the same period in 2008.
The report forecast that spending will dip further in 2010, to $11.22bn, before picking up to $11.56bn in 2011.
According to the study, magazines, TV and newspapers will all be hit by significantly lower ad spending this year, before a shallower decline in 2010.
The magazine market is expected to slide to $841m from $1.03bn in 2008, TV will drop from $3.72bn to $3.34bn and newspapers will dip to $3.81bn, compared with last year’s $4.11bn mark.
This decline is being matched by softening media rates, according to the report. Overall media prices in 2009 are down 6.9%, with magazines dropping 18.5% on last year, TV down 10.4% and outdoor plummeting 14.4%. In contrast, online ad rates are expected to rise 10.6% on last year.
ZenithOptimedia predicted just a 0.6% decline in prices for all media in 2010.
Despite the fall in media spend, the report pointed to the fact that Australia was one of the few developed countries in the world to avoid a technical recession in the past six months.
Globally, media spend is set to fall by 8.5%, according to the same report – a significantly higher figure than in Australia. However, ZenithOptimedia warned that unemployment was still the “major cloud” over the Australian economy.
The study stated: “There is some optimism that we have hit the bottom of the market and for some healthier signs from June onwards.”
ZenithOptimedia chief executive Belinda Rowe said: "The categories that spend a lot of marketing, such as retail, government, automotive and finance, have been affected by the downturn and have driven the decrease. But there are some categories, such as FMCG, that are doing very well.
She added: "Consumer confidence seems to have stabilised and speaking to businesses, the feeling seems to be 'yes, it's tough, but we've seen the worst of it.' I think it will stabilise over the next 12 months.”
