While market economists and the Prime Minister have conceded the rapidly spreading omicron strain of COVID-19 will impose a short-term hit on the economy early in the year, Ms Butterworth is confident 2022 will continue to prove that the ad market’s 2020 performance was a one-off.
“I don’t think it’s going to go off a cliff like it did in 2020 and if you look at 2021, there was a pretty seismic bounce back,” she said.
“If you compare Jan to November 2021 versus Jan to November 2019, for television and digital in 2021 they have already surpassed 2019 totals and even if you look at the total market Jan to November 2019 to 2021, there’s still growth.
“If you look at 2021 on the assumption that it does exceed 2019 you could certainly assume that 2020 was a one-off year.”
The full year ad spend data for 2021 is still yet to be released, with Standard Media Index (SMI), which tracks advertising spending from media agencies but does not account for direct spending, reporting November’s spend figures on Monday.
According to the data, November was a record level for advertising spend, up 1.5 per cent year-on-year to a total of $852 million spent, a record level of ad spend for any financial year period.
“Given the level of uncertainty within the economy, it’s incredible to see such a resilient advertising market in November with the total media investment of $852 million a monthly figure a level of ad spend that has
never before been achieved in Australia,” SMI AU/NZ managing director Jane Ractliffe said in a statement.
SMI tracking on December ad spend suggests it will also be a bumper month once the numbers are finalised, likely up on December 2020 which was also a big month as Australians enjoyed the summer after the first COVID-19 wave.
In 2020 Australia’s advertising market contracted by $1.1 billion in 2020 as the COVID-19 pandemic crunched global spending in the west by $9.9 billion, reversing two years of growth across the US, UK, Australia, New Zealand and Canada.
Ms Butterworth said what has changed since the crunch of 2020 is decisions are being made on a more local market basis now rather than global companies implementing a one-size fits all global approach.
“Now there’s a far more local mindset depending on where each individual country with their different stages of delivery against the pandemic. It’s become a lot more localised in terms of decision-making and understanding what factors are at play,” she said.
For the moment, marketers are generally yet to start conversations with their media agency partners around pausing their adverting spend or raising concerns around COVID-19 and omicron, Mr Walton said.
“There’s no real sense of panic or pullback,” Mr Walton said, acknowledging there’s likely been some deferred activity in sectors like travel and even potentially retail after a subdued Boxing Day sale period.
Ms Butterworth was in agreement, saying that most brands will continue to invest in advertising in 2022 as they did last year as while consumers want to spend, and have the money to do so, brands will continue to advertise.
“It’s really important that brands are as active as they can be to try and get cut through,” she said.
“Consumers want to spend which is the key thing.”
