An Olympian bounceback in monthly ad spend, but the media industry isn't yet back on track

It was only a single month, and included the Olympics, but the latest Standard Media Index numbers show some green shoots

Welcome to Unmade, written just as the birds were waking up Sisters Beach, Tasmania. It still looked dark to me, but they obviously knew better.

This week I’m experimenting with my writing habits, and trying to do most of this newsletter in the morning shortly before it goes out. I rarely focus until a deadline looms, plus, I’ve a hunch I’m a little fresher first thing.

Today’s writing soundtrack: Deacon Blue - When The World Knows Your Name. Queen of the New Year is such a good song.

Happy Garlic Lover’s Day. Personally, I’d have put the apostrophe after the S, but who am I to argue with Perhaps today is just for one, very specific, garlic lover.

SMI - medal winning improvements?b

The Standard Media Index numbers came in yesterday, and they were really good.

Which is a sentence I have not written in some years.

Advertising spend by Australia’s big media agencies on behalf of their clients was up by 26.2 per cent in August compared to the same time last year.

Although it only covers media agency expenditure not direct clients, SMI is the closest we have to a barometer of advertising spend. And because the data comes directly from the agencies themselves, we can be reasonably confident in its accuracy.

And the numbers mean something for the working lives of anybody working in this industry. Not only are they an indication of the health of Australia’s media companies, but ad spend is a good proxy of marketing activity, which in turn flows through to the entire agency sector. No wonder the boss of every agency I speak to - whether creative, media or PR - tells me about their struggles to hire people right now.

So far this year, I’ve tended to put the month-by-month SMI numbers to one side. Although they have been positive, the point of comparison was the corresponding month in 2020, which was of course extraordinarily bad, thanks to Covid. Magazines weren't being published; advertisers weren’t targeting drivetime radio commuters (because there weren’t any) and the outdoor advertising sector was dead.

For meaningful comparisons, 2019 is a more sensible benchmark.

And that’s what made my eyes widen somewhat.

SMI calculates media agency ad spend as being $692m for August this year. But even more significantly, as well as being up on last year, it’s also up on 2019. And 2018. And 2017. And even 2016.

SMI’s boss Jane Ractliffe looks for the positive in her monthly commentary, no matter how bad things are. But this time she’s positively exuberant: “Never would anyone have expected the Australian ad market to be hitting a record high so soon after such a prolonged advertising recession, and also while our two largest states remain in lockdown.”

Before we get too carried away, a major factor in the uplift, particularly for television, was the Olympic Games and Paralympic Games finally happening. It’s the first time since 2016 that the TV sector has written more than $300m in revenue in August, and that was the 2016 Rio Olympics.

The Games sent a lot of dollars in Seven’s direction, even if the network made something like a $50m loss on the event. If I had to take a bet, Seven’s upfront event next Tuesday will nonetheless include news about the broadcaster signing on the dotted line for Paris 2024.

Across the media categories, television - both broadcast TV and ad-supported video - had the best of it in August. TV was up 29.1% and video 72.9%. I’m sure that most of the latter was around Seven’s Olympic streaming.

Other sectors have not yet recovered. Outdoor, although up 28.3 per cent on last August, was down by a horrible 48 per cent last year, so that doesn’t close the gap.

Radio’s improvement, however, now sees it only slightly behind 2019 levels.

And the magazine sector is now so small as an advertising medium that even though revenues were up by 11.7 per cent on last August, you can no longer even see the segment on the SMI bar chart with the naked eye. Thanks, Bauer.

The big question though is where ad spend lands for the rest of the year, particularly compared to 2019. Much of the data for September will already be in front of SMI.

Ractliffe, emphasising the positive, says in her commentary: “But not only are we seeing a record month of ad spend in August we can also see with the SMI Forward Pacings data that the growth will continue into September with ad spend already 5% above last year’s September result (ex Digital).”

Which means that things are less rosy than that may sound. Last September, ad spend fell by a horrible 24.3 per cent between 2019 and 2020, so a five per cent improvement doesn’t come close to September’s numbers recovering to pre-pandemic levels.

We’re unlikely to reach the end of the 2021 calendar year and see that we recorded a recovery to 2019 levels.

And once we get into financial years running from July to June, the comparisons will need to stretch even further. To remove the Covid effect, we’ll need to compare the current FY22 with FY19. Even then, I doubt we'll have quite recovered. It’s been a long slog and there’s more to go.

Algorithm shenanigans

Before I go, I’d like to propose an experiment, if you’re interested in taking part.

I’ve noticed that since I began the Unmade project, work I post to LinkedIn seems to get less visibility than I used to enjoy there before.

I find myself cynically wondering whether, because LinkedIn is in the newsletter business itself, its algorithm is deprioritising links to Substack newsletters such as this one. I could be wrong of course (maybe I’ve suddenly become boring to LinkedIn), but I’d like to try to rule it out.

If you’d like to help me with an experiment, I’d ask you to make two LinkedIn posts over the next few days. In one, comment on an aspect of something I write about here on Unmade, and include a link to it. In the other, simply comment on something I’ve written about on Unmade (and by all means mention where you saw it, if relevant), but do not include a link.

If my theory is correct, your post without a link will get more engagement.

To help make the experiment more robust, in case one topic is more interesting than the other, I’d ask that half of those taking part do the post with a link first, and the non-link post second. And the other half do it the other way around.

My suggestion on how to split into two halves: If you first name begins with a letter from A to M, then post a link to today’s article on LinkedIn, with a thought about it. Then wait til later in the week to post an additional thought about another Unmade post, but with no link.

And if your first name begins with N to Z, then comment on LinkedIn about today’s post about the SMI numbers, but without including a link. And later in the week, post a link to a subsequent Unmade post.

I’d request that you don’t refer to this experiment within your LinkedIn post, in case that skews the results.

Finally, please take a note of how many reactions and shares each of your posts got on Linked In after 48 hours, and let me know the result to I’ll collate and share the data once it comes in.

And as ever, I welcome hearing from you on all topics, to, or via the comment button below.

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Have a great day.


Tim Burrowes

Proprietor - Unmade