Adspend levels decline in Australia

30 March 2010

SYDNEY: Advertising expenditure levels fell by 8.2% in Australia last year, as some of the largest companies in the country responded to the economic downturn.

According to figures from Nielsen, 17 of the 25 biggest spenders reduced their investment in communications on an annual basis over this period.

Wesfarmers, the retail group, topped the charts, despite reining in its outlay by 8.3% year-on-year to A$205 million ($187m; €139m; £125m).

Woolworths, in second, boosted its budget by 2% to A$140m, while the third-placed Harvey Holdings delivered a decline of 1.4% to A$140m.

Elsewhere in the top five, the national government increased its adspend by 3.6% to A$125m, while the joint listing for Néstle and L'Oréal also jumped by 5.7% to A$120m.

In contrast, Telstra, the telecoms giant, tumbled from second to sixth in the rankings after cutting back by 41.7% to A$100m.

By contrast, Unilever heightened the resources dedicated to this aspect of its operations by 33.5% to A$70m, climbing to eighth position for 2009 having been outside the top 20 in 2008.

As figures for Reckitt Benckiser contracted by 9.4% to A$60m, and Procter & Gamble was down by 3.9% to A$55m, Unilever may have thus improved its share of voice in the FMCG segment.

Other major movers included Myer, the department store operator, which saw its advertising expenses rise 14.3% year-on-year.

Toyota, the automaker, slashed its costs in this area by more than 20%, with Qantas Airways, the air carrier, off by more than 17%, and SingTel, the telecoms provider, by 11.1% measured against 2008.

Just seven of the 39 product categories assessed by Nielsen witnessed an expansion year-on-year, with the non-alcoholic beverage sector up by 18%, gaming and gambling by 10% and food by 8%.

Financial services, telecoms and automotive operators tended to adopt the opposite strategy, an approach that is consistent with that observed in most other developed countries.

Online was the only media channel to enjoy growth, and was up by A$32m to A$451m, while TV experienced a slide of A$357m to A$3.4 billion compared with the previous year.

"Advertising spending entered the downturn later than most global markets and also lagged behind Australia's emerging economic upturn in 2009," Peter Cornelius, Nielsen's managing director of media in Australia, said.

"Advertising trends across most media in the early stages of 2010 indicate real growth year on year, albeit comparing with a downward trend in 2009," he added.

Data sourced from Fast Company/Ad News; additional content by Warc staff