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Australia’s Retail advertisers increase advertising expenditure by $90 million in 2017 financial year –SMI data

Announcement posted by Third Avenue Consulting 25 Jul 2017

Total Ad Market to reach a record $7.1 billion

AUSTRALIA’s Retail advertisers delivered the greatest increase in advertising expenditure of any product category in the 2017 financial year with total investment soaring by $90 million, new data from Standard Media Index (SMI) released today has revealed.

SMI’s financial year 2017 advertising expenditure report revealed the top 10 product category movements over the corresponding period in FY 2016.  In terms of total size, the Retail category is only topped by Automotive Brand, which remains the market’s largest product category by providing 11% of all financial year advertising.

But Retail advertisers collectively delivered the greatest growth in FY 2017, with total ad spend up $90.1 million to provide 9% of all advertising this financial year.

Unsurprisingly, the biggest fall in ad spend was recorded by the Government category following the huge spike in ad spend due to the Federal Election last year. The Food/Produce/Dairy and Media categories also declined in ad spend. (See chart next page)

Among the major media, Television remained by far the preferred media for Retail advertisers with total ad spend growing 13.2% to $268.4 million. But the fastest growth in Retail ad spending was in Outdoor where total bookings lifted 50.2% to $54.2 million, followed by Digital where Retail ad spend grew 29.1% to $153.8 million.

SMI: Retail Advertisers Report Stronger Media Investment in FY2016/17

Product Category

Media Type

FY-2017

$ Change on PCP*

% Change on PCP*

Retail

Television

268,432,818

31,235,019

13.2%

 

Digital

153,803,306

34,681,389

29.1%

 

Newspapers (excluding Digital)

95,658,439

-5,161,029

-5.1%

 

Radio

81,124,686

15,138,797

22.9%

 

Outdoor

54,251,835

18,137,290

50.2%

 

Magazines

13,454,880

-2,053,039

-13.2%

 

Cinema

3,784,935

1,065,125

39.2%

 

Other

1,712,991

-2,959,877

-63.3%

Retail Total

 

672,223,891

90,083,674

15.5%

* Prior Corresponding Period

 

 

 

 

 

 

 

 

 

“The large increase in advertising investment by Retailers is clearly due to the intense battle in the supermarket category, as well as the imminent entry of Amazon which will see a surge in retail advertising activity,” SMI AU/NZ Managing Director Jane Schulze said.

“The fall in Government category ad spend also served to disguise continuing growth from other key product categories and shows the underlying strength of the advertising market. But in the first six months of the new financial year there will be yet more tough hurdles given the Rio Olympics and Census were held in that period last year which inflated the market with incremental spend.’’

“Nonetheless we expect the market to continue exhibiting underlying growth due to increasing competition within certain segments and the continual product development on the media vendor side which produces even more ways to target potential purchasers.’’

Australia’s ad market will deliver its 5th consecutive year of record financial year ad spend in 2016/17 to reach in excess of $7.1 billion.

The Australian market was back just 0.1% compared to FY 2016, however, when SMI collects late digital bookings at the end of this month, ad spend will reach yet another record.

The SMI FY 2017 data also showed the fastest growing media sectors compared to the previous corresponding period of FY 2016. Digital programmatic exchanges recorded the biggest increase in ad spend of all sectors, jumping 67.3% to $338 million, followed Social Sites up 20.8% to $229 million and Posters/Billboards up 18% to $338 million. Other sectors to quickly grow ad spend in the year were Sporting Venues (up 12.8%), Search Affiliates (up 9.6%) and Street Furniture (up 6.1%).

“The market was stronger in the first half of the financial year, with total ad spend up 1.2% to $3.7 billion, but suffered in the second half due to the backdrop of huge Federal Election ad spend at the same time in 2016, which saw ad spend decline by 1.6%,”  Ms Schulze said.

“Federal elections are like Olympic broadcasts from an advertising revenue perspective and are absolutely abnormal events, however the underlying result and the longer-term trends show that Australia’s Agency advertising market is set to deliver its fifth consecutive year of record financial year ad spend which underscores the strength of our market.”

ends

About Standard Media Index

Standard Media Index (SMI) was established in 2009 in Sydney and has offices in New York, London and Madrid.  SMI partners with leading global media buying agencies to provide independent, accurate and timely advertising expenditure data to its clients to facilitate informed analysis of the media sector and product category expenditure. Data is sourced directly from advertising agencies’ billing systems and then aggregated to show the combined picture of media Agency ad spend across all major media, media sectors, 40 product categories and 126 Digital product categories.  It allows subscribers to monitor and analyse key data points that can be actioned to grow share and make better investment decisions. SMI provides the only clear picture on how ad dollars are being spent. Its Australian data covers more than 90% of all Agency spend and SMI works with media Agencies in more than 15 global markets.  http://www.standardmediaindex.com/

For further information contact:

Jane Schulze                                                                                                       Rochelle Burbury

SMI AU/NZ Managing Director                                                                  Third Avenue Consulting

0401 704 348                                                                                                      0408 774 577