Tricky six months ahead for media despite ad market green shoots

“Flat isn’t necessarily very newsworthy, but that’s probably the more of the reality of it.”

Loading

One of the key sectors, TV, remains soft says Buchanan, following declines in audience and spend, down 15.3 per cent in the most recent data.

Jarrett adds television is particularly challenged and heading backwards, “partially because they got such a massive bonus in 2022”.

The marketplace is also diversifying out of linear TV “quicker than it ever has before”, he says, with smart TVs reaching “a point of critical mass” as Australians turn to smart TVs to view various BVOD (broadcast video on demand) and SVOD (streaming video on demand) options.

A busy sporting calendar, which includes the Ashes series (Nine), Women’s World Cup (Seven), and Rugby World Cup (Nine) later this year, could offer some respite for television, particularly if the Matilda’s go deep into the competition, Jarrett says.

Compared to total TV figures across 2019-21, Jarrett says spend is only back “2 or 3 per cent”, noting again the conversation is skewed after a strong 2022.

“So it’s not a good story. It’s probably still a poor story, but again not quite as disastrous as maybe people are getting the impression on.”

Behind government, the gambling category is down 20 per cent in the first half of 2023.

With regulations on gambling advertising looming, wagering companies have already begun to adjust spend while they look to position themselves for a life less reliant on advertising.

“Gambling will be the new cigarettes, there’s no question that’s where we’re headed in my mind,” Buchanan says.

Another agency executive, who requested anonymity to make the comment, questioned the value a wagering company gets when “nine of every 30 seconds now is T&Cs”, following regulations implemented in 2022.

While Buchanan says the outlook for the rest of 2023 features “not a lot of growth, but not massive decline”, Jarrett points to international figures as offering a glimmer of hope.

Inflation is dropping in several of the key indicator markets, he says, with the figure down from 8 per cent in February to 5.5 per cent in June domestically.

“There are a lot of things that are pointing to the end of the inflation challenge,” says Jarrett, “which then points to the end of the interest rate challenge.”

“I don’t think it’s going to be easy for the next six months, but there are a lot of indicators that say we might be getting close to the end of the increases and once that plateaus and starts falling, I think everyone will be a lot more bullish, a lot more quickly than we feared.”

Loading

There is another international factor that could prove pivotal – both Buchanan and Jarrett say they are waiting to see how the Hollywood strikes play out before making a judgment on its impact domestically.

“I think it’s predicted if it continues on past next week, it will have impact on release dates and content pushes, so that’s the moment we’re all looking at,” says Buchanan.

Jarrett says the majority of this year’s content is already “in the can”, leaving it unlikely to have an impact in the short term, however, should the strikes stretch out, “you can see it having a real negative effect next year”, he adds.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.