Media Spend to Remain Steady in 2011

The Standard Media Index (SMI) data for November is indicating that advertising spend for 2011 will remain flat year on year. This in itself is a good result for the overall media industry when you consider 2010 represented an immediate bounce back from the GFC and the highest investment levels on record. The monthly year on year decline of 7% for November will, however, leave sales directors (especially the Metro Television ones who saw a 13% decline) keeping a watchful eye on how the European economic markets could potentially affect the Australian media market early next year.

As with all monthly SMI data, there are winners and losers. Metro TV, as I mentioned, has had a poor monthly result, which has seen $39m less revenue for November than this time last year. This has television slide below the 50% share of all investment, a rare occurrence. Digital continues its growth with a 16% increase for November making it 21% for the year to date with Search driving this growth. Digital nestles between Outdoor (9%) and Newspapers (16%) with 12% share of all media investment. Outdoor has performed well versus the rest of the market with flat revenue for the month and year to date.

The category that was leading the decline for November is the usually seasonally strong Toiletries and Cosmetic category which reduced some 30% or $8.1m. Time will tell if this is an actual category decline or if advertisers are targeting December as Christmas gift purchases get later. The Communication and Electrical Products categories also saw 20%+ declines. Retail and Automotive continue to remain as strong categories and FMCG bounced back in November with 16% growth bucking the 9% decline we have seen year on year.

As the negotiation season picks up steam these results will see agencies focus on the uncertainty of the global economy and how this is beginning to affect our own industry whilst the media will be keen to focus on their product for 2012 and how they can lock down guaranteed dollars from as many sources as possible.  We at OMD are expecting steady growth for 2012 with moderate increases as advertisers tentatively feel for brighter times towards the end of 2012 and into 2013.

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