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Aussie agency spend hits A$7bn

News, 25 July 2017
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SYDNEY: Australian media agency spending passed A$7bn in the 2016-17 financial year with digital and outdoor registering the biggest increases, new data show.

According to measurement business Standard Media Index, the industry is set to deliver a fifth consecutive [financial] year of record growth, with spending expected to top A$7.1bn when late digital bookings are added later this month.

Television continued to claim the greatest share of spending last year, the A$3.1bn paid out on this channel accounting for 43% of the total. But that was 2.9% down on the 2015-16 financial year.

Digital was the fastest growing channel, up 8% to A$1.9bn, and within that, agency spending on digital programmatic had leapt 67% to A$338m; social recorded a 21% increase to A$229m.

Outdoor also grew strongly, up 8% to A$864m, while radio posted a 2.5% increase to A$580m.

Print’s decline showed no signs of stopping, as spending on newspapers (excluding digital) slumped 18% to A$449m, while that on magazines (again excluding digital) was down 16% to A$159m. Cinema spending was flat on A$75m while the ‘other’ category fell 26% to A$25m.

In terms of category, the greatest spending increases, both absolutely and proportionately, came in retail and automotive: the former grew 9%, adding $A90m, while the latter was up 11%, adding A$47m.

In both cases, Jane Schulze, managing director for Australia and New Zealand at SMI, pointed to the effects of competition.

“There's more [auto] brands being advertised and as car manufacturers wind back their manufacturing operations, they are putting more into marketing budgets,” she told AdNews.

It was a similar case with retail, where Aldi, for example, “has been making aggressive moves in the market”.

She also noted that spending in the food/produce/dairy category was down A$34m and suggested that much of that had been redirected into the supermarket category, where brands were helping pay for co-promotions.

“I think what is happening there is that brands have to pay supermarkets to contribute to supermarket advertising,” she said.

“Because of the growth in supermarket spend, the individual food brands are helping fuel that and as a result we are seeing a decline in some of their individual advertising.”

Data sourced from AdNews; additional content by WARC staff

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