With no significant political funds to buoy the ad market in 2014 and interest in the football world cup limited by the expectations for the Socceroos success, I expect growth will be steady but not meteoric. Advertising spend is directly linked to overall economic performance and the global economy (especially the US) seems to be showing some green shoots. Locally, whilst the mining boom seems to be slowing, and manufacturing stumbling, the Australian GDP is still predicted to rise by 3%. We are expecting total advertising to mimic this growth.
The FTA market is set for an interesting year with competitive pressures from STV who achieved almost 13% revenue growth in 2013, and digital video which commands as much as 20% of total screen viewing with 18-24’s (Nielsen Multi-Screen Report). With MCN launching their Landmark product and Hbb TV arriving for the FTA’s in Q2 there is an opportunity to make a programmatic play which could secure additional funds, but audience measurement systems need to evolve to effectively deliver this potential. With the revenue injection the networks saw in July and August 2013 due to the federal election, anything more than steady 2% growth seems unlikely.
Whilst ‘digital’ as a channel will continue to see significant growth, what is defined as digital will increasingly blur and traditional display will find it hardest to maintain growth. The growth will come from 4 key areas:
- Digital video as advertisers react to the growth in consumer consumption of this channel, not just through catch-up services.
- The year of the mobile still has not really come to fruition as clear advertising formats have not truly been defined. With publishers taking much more of a platform agnostic approach and audiences spending more time with the channel revenues will grow in 2014.
- Whilst somewhat of a cash cow and difficult to track given it’s mainly direct and single publisher revenue, Search will continue to grow. Making up the majority of the spend in the digital sector this will continue to fuel the rise of digital.
- Agencies and advertisers are beginning to become more savvy and comfortable with trading desks and the benefits of better targeting and lower cost of reaching consumers. This will grow the sector and lower revenue achieved from the more traditional formats and publishers.
Whist there will become a point next year where both magazines and newspapers start to slow in their declines of on average 20% in 2013, the media will still see overall declines in the double figures. Consumer magazines will have the least bad results with a stronger audience and environment story than newspapers.
A relatively stable year ahead in overall terms but competition for revenue will continue to be strong between media and media owners.