Australia’s media agency market is reporting softer demand in October, with the Standard Media Index Agency data revealing an unexpected record-level slump in the retail category advertising expenditure being mostly responsible for the decline.
This month’s data, which is so far showing the total market back 8.1 per cent to $679.0 million (and should revert to a lesser decline of about three pre cent once late Digital bookings are added at month end) is also notable as it’s the first interim Digital release in which Programmatic bookings are in negative territory.
And the data also tracks the continuing growth in ad spend related to the same-sex marriage debate with the year-on-year increase in government category the highest for any category this month (+69 per cent representing YOY growth of $11.5 million) while the industry association/unions category lifted its ad spend by 120 per cent, or by $2.69 million.
“Standard Media Index reported last month that the Government and industry association/unions categories spent at least $10 million on the same-sex marriage debate, and this month the additional bookings from those categories is $14.2 million which suggests more than $24 million was spent on advertising related to the same-sex marriage in the past two months,’’ SMI AU/NZ managing director Jane Schulze said.
“But while the Industry Associations focused their ad spend on the television and newspaper media – their share of that category was 76 per cent and then 9.1 per cent respectively – the government category spread its funds more broadly with TV taking 34 per cent of spend followed by digital, radio and newspapers with 22.6 per cent, 16.5 per cent and 15.4 per cent each.’’
Schulze also said it was highly unusual for the retail sector’s advertising expenditure to fall at this time of year, as more than a third of all retail advertising historically occurs in the fourth quarter.
“Retail category ad spend has fallen 20 per cent from October 2016 levels, which represents a record year-on-year decline in the ten years of SMI data reporting. Interestingly, industry feedback suggests retailers are stockpiling their marketing budgets in preparation for the imminent launch of Amazon in Australia,’’ she said.
And the lower October bookings have also weakened the market’s position for the financial year period, with total agency bookings now back 3.7 per cent on the same four months a year ago. Similarly, calendar year-to-date bookings are now back 1.9 per cent but if Government category expenditure was removed to exclude the effect of last year’s Federal election, the market would instead be back just 0.6 per cent.
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