Report: Digital ad spend on the up

While digital ad spend is on the up, COVID and the bushfires wiped $1billion off 2020 ad spend

An end-of-year surge shows digital ad spend recovering from the COVID-induced ad recession and overall ad spend up 2 per cent year-on-year, according to the latest Standard Media Index results.
 
SMI AU/NZ MD, Jane Ractliffe, said this was now the third consecutive month of year-on-year growth for the AU market which builds confidence that the ad recovery will remain. "There’s now no doubt that the market has moved strongly beyond the COVID ad recession and is quickly rebuilding,’’ Ractliffe said.

Digital’s 15.9 per cent increase in ad spend also resulted in a significant first, with the size of digital’s monthly national marketer revenues overtaking that achieved by TV for the first time in a month as digital’s bookings soared to a record $223 million.

TV ad spend has also had an 11 per cent increase and is now reporting revenue growth of 15.3 per cent for the December quarter and a decline of only 1.2 per cent for the December half. Ractliffe noted total ad spend for the December quarter is up 5.4 per cent.

“More than half of all the ad categories grew their media investment in this period. And forward bookings data shows ongoing growth across numerous categories,” she said.

The large jump in digital ad spend in December was mostly due to the market’s ongoing attraction to social media, with the sector now the second largest after search in the digital category.

"In the past six months, we’ve seen increasing demand for social media sites as Facebook which continues to grow and new entrants such as TikTok, Pinterest and Snapchat which also benefit from the wave of revenues flowing to this sector,’’ said Ractliffe.

The stronger December and December quarter results has seen the Australian ad market’s decline over the second-half period fall to 7.2 per cent and over the 2020 calendar year to 15 per cent from 2019. However, the decline still translates into a $1.1 billion fall in the amount of advertising inventory sold in Australia in the year, with the largest contributors to the decline being the auto and travel.

 On the positive side, ad spend for food, banks and government were all up. Ractliffe pointed to the COVID pandemic, coming so soon after the devastating bushfires, had created a perfect storm for the local ad market, creating an ad recession that was completely unexpected.

“But we can see in SMI’s global data that the same trend was seen in all sophisticated media markets, with an average 32 per cent second quarter advertising decline across Australia, NZ, the US, UK and Canada,” she explained. Likewise, ad spend has been up in the same markets in December also.

"So the recovery is not just happening in Australia but is increasingly widespread as marketers adjust to a new 'COVID-normal’ consumer environment,” said Ractliffe.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.

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