Australia’s food marketers reduce ad spend in 2017

Australia’s food marketers are continuing to reduce their advertising spend in 2017 after strong growth in 2016 saw the sector emerge as the country’s fourth largest advertising category.

In CY 2016, the Food/Produce/Dairy category was one of the market’s growth stories, with ad spend lifting 1.5 per cent to $392.3 million, propelling the food category into fourth position among Standard Media Index (SMI’s) 40 product categories.

But the momentum has stalled in 2017, with SMI’s Agency payment data for the first quarter showing total Food/Produce/Dairy ad spend falling 6.3 per cent from the same quarter a year ago to $83.2 million.

However, most of the decline is due to reduced bookings onto TV and Outdoor, and in contrast food marketers’ spend onto Digital media grew 5.4 per cent for the quarter.

And for the first time this month SMI has launched ad spend for five new sub categories that provide the first real detail on the parts of this market responsible for the growth.

As the table below shows, most of this growth was due to higher spend from the Milk/Dairy/Produce/Baked Goods sub category which grew ad spend by more than 75 per cent in the quarter, taking its share of total category spend to 26.8 per cent from 16.0 per cent in the same quarter last year.

In contrast, the largest sector of this market – Confectionery/Snacks/Dessert Items – reduced its total expenditure by 7.9 per cent.

SMI is also the only company able to report this true ad spend by Digital sector, and shows that in this quarter the Confectionery/Snacks/Dessert Items sector delivered strong growth to Social Sites (+31.8 per cent) but reduced its spend onto Programmatic buying (-14.3 per cent) and Content Sites (-51.9 per cent).

And the growth in the Milk/Dairy/Produce/Baked Goods category was predominantly in Content Sites (+79 per cent QOQ) and Social Sites (+168 per cent).

SMI AU/NZ Managing Director Jane Schulze said SMI’s initial April data shows that after a strong Q1, food marketers are now also reducing spend onto Digital media in April with bookings so far back 29.2 per cent.

“This month there continues to be huge variation in the levels of Digital spending within the key Food/Produce/Dairy sectors,’’ she said.

“For example, the Confectionery/Snacks/Dessert Items market has so far reduced Digital spending 54 per cent this month while the second largest sub category of Milk/Dairy/Produce/Baked Goods grew Digital spend by 31 per cent, and in the process grew its share of the category’s total Digital spend this month from 14 per cent last April to 25.8 per cent.’’

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Standard Media Index collects actual advertising payments from Australia’s major media agencies and as such has the only real ad spend data for 40 major Product Categories and 126 Digital Sub Categories.

73 thoughts on “Australia’s food marketers reduce ad spend in 2017

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