MEDIA FUTURES MID-YEAR UPDATE 2014
Advertisers have revised down initial predictions of a 2.6% increase in spend in 2014 to a decline of 2% in overall spend, according to Starcom MediaVest's Media Futures mid-year update.
The majority of this shift is expected in the second half of the year where advertisers predict a year-on-year spend reduction of -3.8%. The first half of 2014 was almost flat, with a -0.3% decline in spend recorded by advertisers in the survey.
The report found that a quarter of advertisers have seen their ad spend increase year-on-year to date, however the majority of advertisers have either seen a decrease or no change to their ad spend for the first half of 2014. That trend looks set to continue into the back half.
Starcom MediaVest CEO Chris Nolan said the correction in anticipated expenditure was unusually large.
"We often observe mid-year corrections, however, this correction is unprecedented. It appears to correlate with a significant decline in the May consumer confidence levels. " Nolan said. "It's worth noting that the Federal Government budget was also released in May."
The decrease in spend is most likely to impact FTA TV but advertisers will also spend less on most media across the board in the back half of 2014, including online media.
Nolan said anticipated spend on owned and earned media, including social media, is still expected to rise and is in line with the annual survey.
"Advertisers have downgraded their growth expectations for owned and earned media from +7.8% to +4.9% for the mid-year update.
"In line with the annual survey, owned and earned media still accounts for almost 50% of advertisers' time and effort spent on media activities, which we estimate is significantly higher than its share of spend," he said.
Among advertisers who have increased their spend year-to-date, television and magazines were the main media to see that increase. However, these media were also the media where spend was reduced among advertisers who have decreased their spend, as well as paid search/SEM.
Only 13% of advertisers expect their second half ad spend to reflect an increase on the same period last year. While 42% expect no change, a decrease is expected by 38% of advertisers.
44% of advertisers who expect their ad spends to decrease in the second half of 2014 versus the same period last year indicate the decrease will be more than they anticipated at the beginning of the year.
About Media Futures
Starcom MediaVestGroup has been conducting Media Futures since 1985. It is considered one of Australia's most authoritative predictors of expected advertising budget changes, and is the only survey of its kind of national advertisers and key media executives around the country. Interviews are conducted using telephone and online methodologies, with the fieldwork and data currently provided by McNair Ingenuity Research. The fieldwork was conducted from November 2013 through to January 2014. A representative sample of the top 600 advertisers and every major media sales director in the country participated in the current study. All results are compiled on the basis of one value for each interview, with no weighting according to either the size of the advertisers' budget or media billings.
About Starcom MediaVest Group
SMG is the Human Experience Company. We believe experiences matter. They enhance lives and build brands. We bring brand experiences to life through SMG's three global award winning agency brands: Starcom, MediaVest, and Spark. In 2014, SMG was named Media Network of the Year at the Cannes Lions International Festival of Creativity. SMG was also named Festival of Media Global Network of the Year for the second year in a row. Ranked the number one global media network in billings in the world by RECMA, SMG (www.smvgroup.com) encompasses an integrated network of human experience strategists, investment specialists, content creators and digital & technology experts. With over 8,000 employees in 130 offices worldwide, SMG partners with the world's leading companies including The Coca-Cola Company, Kraft Foods, P&G, and Walmart. In Australia SMG has 5 offices and more than 200 employees creating experiences for partners such as Suncorp, Optus, Virgin Mobile Australia, MARS, SAMSUNG, Subaru and Metcash. We were named Festival of Media, Global Media Agency of the Year in 2012 and have made the BRW Top 30 Most Innovative Companies List 2 years running.
Follow us via @StarcomAus on Twitter.
SMG is part of Publicis Groupe [Euronext Paris FR0000130577, CAC 40],
one of the world's leading communications groups.
For further information contact:
Access Public Relations
T: 02 9292 7003
M: 0424 470 923
Access Public Relations
T: 02 9292 7009
M: 0408 972 997