Soaring election advertising spend has pulled the market out of its Covid-19 slump, but is this trend set to continue in 2021? We chat exclusively to Jane Ractliffe who gives insight into media and marketing ad spend in 2021.
New Zealand’s media industry looks set to emerge from the Covid-19-induced slump. According to a Standard Media Index (SMI) report, EOM October 2020 projects that November is well positioned to report positive growth for the first time since March. SMI data for the month shows a total market demand so far back just 2.2 percent with that data collected with another week of trading still to occur.
The good news for media owners follows a strong October result with the lowest decline in national marketer advertising spend since the pandemic began in March with the value of total bookings back just 2.4 percent, driven largely by a 94% year-on-year increase in Government Category advertising spend given this was the month of the national Election.
SMI AU/NZ Managing Director Jane Ractliffe says that the SMI data proves the New Zealand advertising market is now moving quickly out of the Covid-19 slump with both the Digital and Radio media reporting strong October results and TV remaining stable.
“After such a horrid six months through this pandemic it’s very encouraging to see the NZ media market return to a level of normality in October and to now be reporting much stronger increases in future activity,’’ she says.
Ractliffe adds that key trends evident in the NZ Digital media advertising include a trebling of ad spending to Social Media websites such as Facebook and Snapchat and a surge in bookings to the premium Content websites market (+87 percent YOY).
|SMI NZ: October, Early November Ad Spend Trends|
|Major Media||Oct YOY Change||Early Nov Trends|
*Note Magazines affected by closure of some titles since prior year.
NZ Marketing sat down with Ractliffe to get further reaction and her outlook for 2021.
With a positive end to 2020, what is your outlook for 2021?
I expect the outlook for 2021 to be very positive as there will be a lot of pent up advertising demand due to a lot of campaign and product launches being postponed during the Covid-19 crisis. We’re also expecting the Covid-19-safe status of sophisticated media markets like New Zealand and Australia will make us attractive markets for more offshore companies to test new products and services given our populations can move about and shop relatively normally and have been able to maintain reasonable levels of disposable income. And of course there’s the delayed Tokyo Olympics being held next year, and those events always prompt a huge spike in ad demand.
What is your advice for marketers looking to finalise their advertising spend budgets for the next financial year?
It’s going to be a high-demand advertising market next year so my advice is for marketers to finalise their campaigns soon and get them booked. We can see in our Forward Pacings data that the New Zealand media market in December is already 80 percent booked compared to the same month last year, and the month has not even yet begun. So there’s definitely a need to get organised. Late marketers will miss out on their preferred media placements.
What positives can media companies take from this into the new year?
The only positive that media can take from the trauma of the worst advertising recession in history is the fact that they survived. So if you have survived 2020 you can survive anything. All media companies are now also so lean in relation to costs that so much more of the returning revenue will fall to the bottom line. We also saw post the GFC huge growth of more than 10 percent from the New Zealand ad market so I’m expecting similar – if not higher – rates of growth in 2021. It will be a great year to be in media.