Government spend helps pull ad market back towards growth

Government advertising helped pull Australia’s ad market back towards growth in May, with Guideline SMI data showing agency bookings down just 0.5% as public sector spend surged 60.8%.

The lift added an extra $22.8 million to the market and benefited every major media channel, with each recording at least 35% growth in government ad spend.

The May result comes after earlier months were distorted by the Winter Olympics and last year’s Federal Election comparison period, giving the market a clearer read on underlying ad demand.

Outdoor emerged as the strongest growth media in May, with bookings up 14.3% year-on-year. Guideline SMI said the growth was spread across the market, with each of the five largest outdoor sectors reporting double-digit gains.

Cinema also lifted strongly, with bookings up 22.6% on the back of a stronger film slate, while newspaper print ad spend rose 1.4%, driven by double-digit gains in regional press.

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Guideline SMI APAC managing director Jane Ractliffe said May was the first result this year to provide a clearer view of underlying demand.

“We’re seeing a return to more normal programming in May with each of the three largest product categories – Retail, Auto and Government – all reporting sizeable increases in media budgets and other key categories like Pharmaceuticals and Non-Alcoholic Beverages also spending more,” Ractliffe said.

“And given the lag in collecting ad spend for Social, Search and Programmatic media we’ll see these gains further amplify in the next few weeks to deliver higher ad demand in May.”

Automotive brand spend rose 11.3%, again driven by higher bookings from the electric vehicles and hybrids subcategory, which more than doubled during the month.

The FIFA World Cup also began to flow through the market. SBS, which is broadcasting the tournament, almost doubled its May ad spend ahead of the event, helping limit metropolitan TV’s decline to 3.4%.

When related streaming spend is included, total video bookings excluding programmatic were back just 0.9%.

Gambling brands also lifted spend ahead of the World Cup, with bookings up 23.8% year-on-year.

Despite the stronger underlying picture, several media channels remained in negative territory. Standalone digital fell 5.5%, broadcast television was down 4.1%, audio fell 6%, news publishing slipped 2.8% and magazines were back 2.4%.

Digital video was one of the stronger pockets, up 18.6%, while magazine digital rose 33.9%, although not enough to offset the broader decline in the category.

The May result suggests the ad market is beginning to stabilise after a noisy start to the year, with government, outdoor, cinema, automotive and World Cup-linked spending helping pull agency bookings closer to positive territory.