SMI: Australian ad spend breaks records in 2021 to reach $8.6bn

Advertising investment proven to be buoyant despite uncertainties of Covid throughout 2021

Australia’s media agency spend hit a record $8.6 billion in 2021, with strong December advertising levels ensuring the sector continued to buck concerns around Covid-19 conditions.

According to the latest Standard Media Index (SMI) figures, ad spending across the 2021 calendar year reached $8.6 billion, buoyed by consecutive year-on-year growth for each month of last year. This was also $323.5 million higher than the previous record reported by SMI in 2018, $550.5 million higher than 2020, and $1.6 billion higher than 2020.

SMI A/NZ managing director, Jane Ractliffe, said the results again proved the advertising economy is one of the more robust. Data illustrated numerous product categories are spending far more on advertising now than in the pre-Covid era.

“Given advertising expenditure is so strongly correlated to GDP, this SMI data provides a very strong indication that the broader Australian economy is moving well beyond the original Covid downturn and has instead learned to function extremely effectively in the new Covid era,” she said.

“The SMI data clearly shows the economy is being fuelled by a level of advertising expenditure that’s never before been seen.”

Across the 20 largest product categories represented by SMI data, media investment in 14 categories is well above that reported in prior to Covid’s arrival on Australian shores in March 2019. For example, the level of ad spend from the communications category in 2021 was 47 per cent higher than in 2019, while alcoholic beverages ad spend grew 52 per cent in that timeframe. Food/produce category ad spend was up 25 per cent and technology up 59 per cent.

“This all underscores the fact that the level of confidence in today’s market is at unprecedented levels,” Ractliffe said.

SMI figures indicated acceleration of digital spend. In 2021, digital media delivered the highest level of annual ad spend, up 35 per cent compared to 2020. Digital media accounted for 38.6 per cent of all agency ad spend and grew its share by 3.2 percentage points from the 2020 year. Social media was the fastest growing sector in this category, with total ad spend jumping 51 per cent compared to 2020.

According to SMI, the only other media to grow share this year were outdoor (+0.2 percentage points) and cinema (+0.1), both sectors significantly affected by the onset of Covid lockdowns.

Despite this, Ractliffe said allocating digital revenues back to traditional media content showed video to be the year’s largest contributor, up 19 per cent. Non-traditional digital revenues reached $2.8 billion, a 35.4 per cent increase.

For Ractliffe, 2021 conditions were also notable for the fact that ad spend continued to grow even as the prior year periods became more ‘normal’. For instance, Q4 2021 spending was up 8.1 per cent compared to 2020 and 15.5 per cent compared to Q4, 2019. Q2 2021 spending was 60.1 per cent higher than in 2020, and 4.8 per cent higher than Q2, 2019.

“The second quarter of 2020 bore the brunt of the COVID pandemic given the shock of the first wave of Covid, but then the economy began to pick up. These quarterly results highlight the market’s overall strength as the level of ad spend continued to grow well beyond 2019 levels throughout the year,” she said.

Overall, full-year ad results were buoyed by a 7 per cent lift in spending during December to move beyond $700 million for the first time. Ad spend also experienced unprecedented highs in November 2021.

Across channels, metropolitan TV had a record year, with linear TV ad spend up 20.1 per cent to $2.52 billion and regional TV ad spend 1.6 per cent back on the high set in 2018. Regional radio also had a record level of annual ad spend in 2021, while national print mastheads grew 19.3 per cent in 2021 to deliver their highest result in five years.

Ractliffe said the current level of high demand looks set to continue, with January ad spend already indicating growth mostly driven by television off the back of the Australian Open broadcast shifting into the month of February in 2021.

Credit: SMI


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