SMI Data: Federal Election Helps Stymie Plummeting Ad Spends In April
Australia’s media Agency market suffered from significant timing and event-related issues in April 2019 to report a 7.6 per cent decline in underlying advertising expenditure to $522 million from last year’s record level of ad spend.
A high level of business caution also impacted April’s results ahead of the Federal Election with more than a third of all SMI product categories reporting lower demand in April, led by the banks which reduced ad spend by 35.5 per cnet from the abnormal levels evident during the Financial Services Royal Commission last April.
The Commonwealth Games also buoyed advertising expenditure last April, while this month also featured the extended Easter/ANZAC Day holiday period which did not feature in April last year.
The resultant demand changes are highlighted in the following graph, which importantly provides the historical context in which to view the latest results. Notably, the value of total April 2019 advertising bookings is two per cent above that achieved in April 2017:
But the lead up to the Federal Election at least ensured a strong level of advertising from the political parties/industry associations/union product category this April, with its total soaring by $16.3 million to $18 million.
While television enjoyed the largest share of those dollars, some of the largest category gains were seen in press and radio and those gains ensured those media were the only two reporting year-on-year growth in April.
SMI AU/NZ Managing Director Jane Ractliffe said SMI’s move to create this category last year provided the market with its first view of ad spend for this specific market, with this ad spend previously included in SMI’s government category.
“This data is fascinating as it shows a significant 20.8 per cent decline in spending from this collective group on major media in the lead up to the 2019 Election compared to their ad spend in the four months leading up to the 2019 election,’’ she said.
“And there’s also been significant changes as to where this group allocates its media spend, with television’s total reducing in favour of higher spending on radio, newspapers and the digital media.’’
And Ractliffe said the extent of lower business confidence in the market in April was highlighted by the fact the two largest categories of retail and automotive brand were reporting large April declines, with retail ad spend back 7.1 per cent (with the largest decline seen in the digital media) while auto brand bookings fell 21per cent with those lower bookings impacting all major media.
April’s lower result has also impacted SMI’s calendar year-to-date results, with that total back 4.3 per cent but with growth evident in radio (+0.3 per cent), digital (+0.1 per cent) and subscription TV direct (+11.8 per cent).
And over the longer financial year-to-date period the market is back a lesser 1.6 per cent with the outdoor media delivering the best results (up five per cent), digital up 2.4 per cent and radio bookings up 2.3 per cent.
SMI has been tracking the advertising expenditure of all major political parties, unions and industry associations/lobby groups since creating this as a separate product category mid last year.
As all data history came with the new category, this is the first time we have been able to clearly show how the collective media shares of these advertisers have changed in the lead up to two Federal Elections.
Apart from the reduced advertising expenditure, there’s also been a significant change in the category’s media mix, with TV losing share to radio (actual category ad spend grew 16.9 per cent), digital (category ad spend up 9.8 per cent) and press (category ad spend up 79 per cent).
Advertisers included in this data include the state and federal offices of the Liberal and Labor Parties, the Greens, the Nationals, Centre Alliance and various Union campaigns (CFMEU, Change the Rules etc). It does not include ad spend for Clive Palmer’s UAP in either period as that party has purchased all advertising directly from media groups.
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