Report: Ad market starts 2021 softer

The continuing impact of COVID-19 hit ad bookings in January but future bookings show positive signs across many ad markets

Digital media advertising has narrowly taken the largest share of ad spend for the first time, according to the latest Standard Media Index (SMI) results.

The overall ad market was softer in January as the delayed Australian Open and the continued impact of COVID 19 briefly interrupted the market’s COVID recovery. Total media agency ad spend was down 7.3 per cent in January as the metro TV market reported a 5.3 per cent fall in bookings due to the delay of the Australian Open broadcast.

Only digital ad spend registered year-on-year growth (up 1.8 per cent) as social media, programmatic and video sites all continued to report double-digit percentage growth.

"Digital media has forever changed Australia’s advertising landscape and has been on a strong growth trajectory for more than 10 years,” said SMI AU/NZ MD, Jane Ractliffe.

In January 2021, digital accounted for 37.6 per cent of bookings, while TV registered 37 per cent and all other media 25.4 per cent. However, the digital ad bookings also include digital ads for traditional media. "When digital revenues sold against traditional media content is excluded from this top-line analysis, digital’s share of the total falls back to 32.2 per cent,’’ Ractliffe said.

Ractliffe said the strength of Australia’s TV market has seen it take longer than elsewhere for pure digital media agency bookings to overtake that of TV.

"Given the likely return to TV growth for the rest of Q1 it will be interesting to see if this trend lasts beyond a single month, but at least for now the lack of the Australian Open combined with continued digital gains has seen the digital media emerge as Australia’s largest this month,’’ she said.

Looking further ahead the year, the SMI data suggests a more consistent recovery is underway, as the posters/billboards market, the largest sector within the most affected COVID media of outdoor, was already reporting far higher future ad demand than for the same time last year.

February demand is already in line with what was seen before the start of the COVID pandemic last year, while for March the total demand is running at four percentage points above the same time last year. April demand is already seven percentage points higher.

The retail outdoor sector is showing positive signs while national newspapers and regional radio have reported three consecutive months of growth and, led by COVID-related ads, government bookings are up, and health care and food/produce/diary up too.

“Outdoor future bookings fell away quickly from February 2020, but the sheer quantum of the current uplift with the data showing there’s a 26 percentage point differential in future February bookings suggests this key media is on its way to recovery,’’ said Ractliffe.

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