Ad spend plummets by 40% in May: ‘Far worse than anything ever experienced’
The media agency-funded ad market fell 40.4% in May, a record decline of $234m, according to the latest Standard Media Index (SMI) figures.
The result puts the market on track to lose $700m worth of ad spend in just three months, from April to June. SMI AUNZ managing director Jane Ractliffe said the enormity of the decline is “far worse than anything ever experienced”.
Many brands within significant product categories pulled the vast majority of their advertising budgets in response to COVID-19’s impact on revenues, and all major media reported double-digit drops for the month, which follow April’s 35.3% ad spend slide.
The preverbal has hit the fan as expected. Business are in a recession but this is bad news. Tighten the belt.
Its interesting that media owners are not seemingly moving with the downward swing, making media more ‘appetizing’ a buy for sectors who are trading and wanting to float the market…. unlike the real-estate market it seems there are no winners in the Ad market. Instead of doom and gloom now should be the time for sectors to ‘challenge’ the audience with interesting content with support from the media owners to ‘vibe’ the market…. and experiment… its typical suit marketing…. no creativity under stress….
It’s been well known for a long time that SMI is an incorrect figure when it comes to dedicated Performance Media spend like Google. I remember sitting with the head of a big insurance company at a presentation given by SMI on Google spend where he pointed out that if he moved his spend from in house to an agency then according to SMI there would have been an 80% increase that month.
There would have been no increase, it’s just that now an agency that reports their data to SMI had the spend, as opposed to Google who always had it.
I’d suggest the drop in spend was agencies moving the money to channels they made more from or companies moving the spend from agencies to direct NOT people pulling the spend from Google and other non SMI reported medias.
As long as we continue to support this flawed reporting we won’t ever know what’s really going on.
This is as bad as advertorial.