SYDNEY: Market uncertainty about the implications of the UK's decision to leave the European Union, coupled with concerns about Donald Trump's presidency, appears to have had a material impact on media spend in Australia.
Agency bookings reported to Standard Media Index (SMI), the adspend monitoring service, were down 13% to $467.7m in February, although the total is expected to rise once late digital bookings have been calculated.
Last month's media spend was also affected by a shorter reporting period compared with last year as well as lower government spending since last year’s federal election.
However, Ricky Chanana, National Head of investment at Maxus, the WPP-owned media agency, told AdNews that Brexit and Trump are causing large multinationals to rein back on spending.
"We're seeing a fairly slow start and what's happening in the US and Britain has impacted quite a bit on big clients, such as FMCGs and automotive, pulling back a little bit," he said.
"If you think about it, the Trump and Brexit effects happened Q3 and Q4 last year and we're starting to see that spread around the world. Because Australia is quite far away, it's hard to know how deep or long-lasting the impact will be but I would think we will have a lower Q1 and Q2 before it picks up again."
According to the data supplied to SMI, newspaper bookings in February were down 35% on the previous year, while TV was down 6%, radio was down 11.3%, and outdoor fell 12.2%.
Even digital was down by 19%, but the final figure is expected to be flat once late bookings have been taken into account.
Jane Schulze, SMI's Managing Director Australia/NZ, confirmed that the majority of large product categories reported double-digit declines, but remained hopeful that the figures for March would improve.
"Australia's agency market will increasingly face tougher comparative periods as we move closer to the one year anniversary of the federal election last July, and then the Rio Olympics in August," she said.
"However, March 2016 experienced a similar level of demand as we've seen for February 2017 so hopefully that may make March an easier month from a comparative standpoint."
The Global Marketing Index for February, produced by World Economics, shows that marketing budgets are decreasing across the Asia-Pacific region, while trading conditions are weak.
Data sourced from AdNews; additional content by Warc staff