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OUTLOOK – TV and digital fuel ad spend surge

By Chris Pash


The ad spend canary has taken off.

Television is hot with supply right now and digital is surging as bookings through media agencies hit positive territory, breaking a two-year slide.

Media agency analysts are upbeat as SMI (Standard Media Index) numbers show December as another positive month and with forward numbers indicating the run upwards continuing into January and February.

Ad spend for digital — with rising demand for social media including Facebook — jumped 15.9% in December to a record $223 million. Television had an 11% increase in agency bookings.

Total ad spend, as recorded by SMI, for the three months to December was up 5.4%, ending 26 months in a row of negative numbers. The key spending categories were food, banks and government.


Pia Coyle, national head of investment at Ikon Communications, says TV and digital are continuing upwards.

“Television supply is still very tight, and so to get the outcomes we need for clients, negotiations have taken longer than usual,” she says.

“We are all waiting to see how the new program launches will perform and how the old favourites will stack up.

“Radio will be buoyed by their healthy revenue in December, proving to bounce back a lot more quickly than first thought, likely driven by the tightness in TV.

“Expect January and February to keep this trend, but post Easter, the market will likely slightly come off the boil.”

Steve Allen, director of strategy and research at Pearman, says the the year finished stronger than expected, especially TV, internet and radio.

For the year he had forecast -16.02% and it ended at -15%.

“Considering where retail trade has trended, about +6% for the year (ABS), the media markets have been considerably more affected due to the wider breadth of goods and services which advertise.

“Never-the-less, the gap between retail trade and advertising investment is remarkably wide, we believe the widest it has ever been. A unique year, no doubt.

“Early reports of January suggest the advertising market conditions have held, thus you could say the recovery continues. But again, with snap lockdowns, no sustained pattern of recovery is likely.

“We maintain our view of 2021 as a recovery year, however not back to 2019 levels.”

Ben Willee, general manager and media director of Spinach, says the December numbers are very good news for the whole industry to see the market starting to grow again.

“We’re all hoping that high levels of consumer confidence translate into advertiser confidence,” he says.

“It’s important to note this is not an old media versus new media debate. Increasingly activity falls under ‘digital’ when it is just the delivery vehicle.

“We’re still buying lots of activity on audio and video placements, we’re using data to ensure it’s the right audience and being channel agnostic about the delivery mechanism.”

Scott McCarthy, senior performance specialist, Alpha Digital, says the increase in spend in performance-orientated platforms like search and social media reflects the patterns observed with clients over the holiday period in 2020.

“A number of retail brands pulled their digital performance media investment forward from later in FY21 to maximise Christmas sales, while JobKeeper was fueling discretionary expenditure,” he says.

“Outside of the holiday period, there was also an overarching trend in 2020 for advertisers that have historically been big spenders in traditional media channels (particularly outdoor, cinema, and print), to diversify their investment into digital platforms during COVID to maintain brand awareness and sales.

“Many of those advertisers have now experienced increased cost-effectiveness, more accurate targeting, and better attribution that they previously weren’t accustomed to with their old media mix.

“This suggests digital might see more time in the spotlight in 2021 channel planning, with a higher slice of the pie. Digital advertising will no longer be an afterthought, but the heart of future media strategies.”

Andrew Livingstone, managing director, Mediahub Australia: “A real shot in the arm for the industry, particularly given the three month trend and the alignment with other global markets.

“Just need for the uplift to be evened out a little, it would be great to see OOH and cinema bounce back – that would indicate a fuller market recovery and increased consumer confidence.”


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