Marketing concept: Ads on digital background
Marketing concept: pixelated words Ads on digital background, 3d render.
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A two-speed recovery from the COVID advertising downturn is underway in the local ad market, with advertisers showing clear preferences for media less impacted by the pandemic, according to the latest Standard Media Index (SMI) report.
The agency market continued to recover from the COVID pandemic, reporting a reduced year-on-year decline of 2.6 per cent to $557.9 million as the start of a two-speed recovery begins to emerge. Television returned as the largest media after temporarily losing that title to digital in January as it delivered by far the strongest growth with total bookings up 8.5 per cent. This was led by Metropolitan TV (+12 per cent), which was buoyed by the delayed Australian Open broadcast.
Digital ad spend grew just 1.2 per cent in February, revealing uneven demand with strong growth in ad spend to social media (+12.3 per cent) and video sites (+12.7 per cent). However, the value of ad spend in the largest digital sector of search fell by 8.4 per cent.
SMI AU/NZ MD, Jane Ractliffe, said advertising trends would best be described as patchy given the varying figures across the key digital and outdoor media. “Key outdoor sectors such as aviation and transit continue to be affected by COVID given fears of travel disruption, while in the digital media there was also a large decline in spending onto comparison websites as well as search,” she said.
Ractliffe also said the slowdown in digital’s growth was surprising given it has reported double-digit gains for the past four months.
"But this month we’ve seen a large decline in finance-related spending across the digital media, while other key categories such as restaurants and travel also dented overall digital demand with reduced ad spending," she said.
On the positive side in digital ad spent, there has been an uptick in spending on premium content sites, with the total up 7 per cent in February as companies such as NEC, News Corp, Spotify, ViacomCBS and eBay saw strong growth in the value of their directly sold inventory.
Looking ahead, Ractliffe said this should be the last month of lower ad demand as SMI’s Forward Pacings data shows the entire market will be reporting growth from March onwards given the depths of decline experienced last year.
"SMI recorded the largest declines in history in April and May 2020 so the prior year comparisons are very easy and we’re expecting very strong double digit advertising market growth for all media in those months," she said.
"The only question will be where advertisers allocate their increased ad spend across the media, so subscribers to our Forward Pacings data will have a key competitive advantage as they get an early view of product category ad spend and will be able to direct their sales teams to the categories showing the strongest demand."
Ractliffe also confirmed that with today’s data release SMI has finished the process of adding the IPG Mediabrands data back into its Australian database.
"We are thrilled to have included Mediabrands as it gives all media stakeholders even more confidence in the SMI data as we continue to track the market’s COVID recovery," she said.
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