Data shows ad spend slowly recovering

The huge drop in ad spending brought on by the pandemic is starting to shrink and forward bookings show that trend continuing with numbers not far off last year

National ad spend is showing signs of recovering, with lower declines in June and July and August numbers already showing stronger spending than previous months, according to the latest Standard Media Index data from July.

After the massive hit to the industry as the COVID-19 pandemic started, all major media again reported large double-digit declines in July ad spend. But there were some stronger sectors, with regional radio bookings down just 11.6 per cent, social media ad spend down 13.8 per cent and bookings to video sites back just 13.7 per cent.           

SMI A/NZ MD, Jane Ractliffe, said the data shows there will be an even lower level of decline in August with the total, excluding digital media, so far back up 25.2 per cent compared to July results.       

Ractliffe said strong forward bookings for numerous product categories and both the TV and digital media returning more quickly to a pre-COVID state, with digital’s July decline of -15.6 per cent the lowest of any major media.

“And for the month of October, the value of committed ad spend is now only six percentage points behind where it was at this time last year,” she said.   

In terms of product categories, there has been stronger demand in some areas, with the largest category of retail delivering more stable bookings, down 3.8 per cent in total, as chemists, supermarkets and outdoor/garden retailers all grew their media investment.

The largest percentage increase among the major product categories came from the toiletries/cosmetics market, up 20.7 per cent. Within this market the investment in advertising hair care products almost doubled with most of those extra funds moving to the TV and digital media, oral care advertising grew 11.7 per cent in July and the other toiletries market, mostly deodorants, more than doubled its media investment.

Given the lower July decline, the trend for the calendar year-to-date also continues to improve, with the market now back 24.5 per cent over the past seven month period. That result was initially driven by the natural disasters at the start of the year, but was then exacerbated by COVID-19 with ad spend falling by 43.5 per cent in May.

“All markets are slowly rebuilding after COVID inflicted huge declines in advertising expenditure and it’s great to be able to report the early signs of growth as the media world tries to return to a new normal,’’ Ractliffe said.

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