Ad spend declines in May as poor government spend ‘dampens’ demand
Australian advertising spend was down by 7.2% year-on-year in May, due to deficits in retail, automotive, and government spend.
This is according to the latest Guideline SMI figures, which showed that with the federal election occurring so early in the month, there was little positive influence on ad spend, and ongoing decline in government-related ad spend continued to “dampen” demand.
Government spend dampened ad demand in May
“In previous elections we’ve usually seen a strong spike in government category advertising ahead of the election, but this year was remarkably different with government bookings down 29.0% in May and back 27% in the current January to May period compared to the last election year of 2022,” said Jane Ractliffe, APAC managing director of Guideline SMI.
Despite the early timing, election bookings flowing to the Nine and News Corp news media websites boosted ad spend to digital content sites by 1.2% in May.
Other factors for the overall decline included reduced spend in the retail and automotive categories, which had “double-digit declines”. This had an “outsized impact” on the total market, according to Ractliffe, given their “sheer volume” of ad spend.
“But if we removed those declines, along with government, from the market, then underlying demand for the month is back just $10 million,” she said.
The deficit is expected to be reduced, however, given the lateness of digital bookings in May. So far, digital is back 6.5%.
Within digital, bookings to TV streaming and video sites remained at the top, jumping 7.8% year-on-year. The effect of the late bookings is highlighted with programmatic spend, which is down 13.4%, and search spend, down 9.3%.
Elsewhere, television spend declined 12.8%, while radio declined 12.7%. Newspapers declined 7.6%.
On a positive note, outdoor — particularly posters/billboards — and cinema had record levels in May, with spend jumping 4.6% and 12.8% year-on-year, respectively.
Magazines also grew slightly, up 0.9%, with growth in both trade and consumer sectors.
Across the calendar year-to-date period, total bookings are up by 3% — or almost $100 million — year-on-year.
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