Jane Schulze

AUSTRALIA’s auto industry brand advertisers increased their advertising expenditure by $46.9 million in the 2017 financial year, according to data released this week by the Standard Media Index (SMI).

SMI’s financial year 2017 advertising expenditure report outlines the top 10 product category movements over the corresponding period in the 2016 financial year.

Car brand advertising remains the market’s largest product category, representing 11 per cent of the total.

The retail category was the only sector to show greater growth, with its total ad spend up $90.1 million to provide nine per cent of all advertising in the 2017 financial year.

The biggest fall in ad spend was recorded by the government category following the spike in ad spend due to the Federal election last year.

The outdoor media sector had the highest percentage growth in ad spend from auto industry advertisers, up six per cent to $9.7 million. Radio only saw a slight increase of one per cent, while auto brand advertisers reduced their ad spend in both newspapers and magazines (except in their digital versions).

These figures are for advertising placed through agencies only.

“The large increase in advertising investment by automotive brands could be the result of Holden and Toyota’s decision to end car manufacturing in Australia, which is seeing a lot of that spend being redirected into marketing,” said SMI Australia and New Zealand managing director Jane Schulze.

“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.’’

According to SMI, Australia’s ad market will deliver its fifth consecutive record financial year ad spend in 2016/17 to reach a total in excess of $7.1 billion.

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The Australian market was back just 0.1 per cent compared to the 2016 financial, however, when SMI collects late digital bookings at the end of this month they expect 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 per cent to $338 million, followed by social media up 20.8 per cent to $229 million and posters and billboards up 18 per cent to $338 million.

A digital programmatic exchange is a technology platform that facilitates the buying and selling of media advertising inventory from multiple ad networks. The approach is technology-driven as opposed to the historical approach of negotiating price on media inventory. It is effectively using machines to buy ads.

Other sectors to quickly grow ad spend in the year were sporting venues up 12.8 per cent, search affiliates up 9.6 per cent and street furniture up 6.1 per cent.

By Daniel Cotterill