THE advertising market will be more resilient than expected in the six months to December, according to analyst Bernard Holt, who is predicting growth will keep pace with the June half at about 6 per cent. The prediction follows figures released this week by Mr Holt's company CEASA (Commercial Economic Advisory Service of Australia) showing advertising grew 6.4 per cent to $6.7 billion in the six months to June compared with the same period last year.
While that growth was only half as strong as the June 2007 figure of 12.5 per cent, Mr Holt said fears of a further significant slowdown were being overplayed.
“Everybody's saying we're going to be in terrible trouble for the second half,” Mr Holt said.
“But people have got to flog their merchandise and Christmas (is approaching) and they have simply got to advertise,” he said. “That goes for everything from cars to houses.
“The predictions are for about 4 per cent growth. I think you'll find it's not as bad. I think it's much more likely to be 6 per cent,” Mr Holt said.
“If the financial meltdown has a big effect, then there will be corrections.”
Internet advertising continued to hold up the figures. When online was excluded, overall advertising growth in traditional media fell to about 2 per cent, Mr Holt said.
The report did nothing to allay financial analysts' fears of a general slowdown next year.
Goldman Sachs JBWere media analyst Christian Guerra said the Australian advertising market faced “a significant cyclical slowdown”.
“We currently forecast full year 2009 ad market growth of 0.4 per cent,” he said in a note to investors. “We expect a cyclical recovery in 2010 (of 6.2 per cent).”
CEASA reported only three media showed stronger growth in the six months to June this year than during the same period last year: outdoor advertising, which grew 14.1 per cent (up from 9.3 per cent last year), radio (up from 5.3 per cent to 5.7 per cent) and pay-TV (17.9 per cent to 20.2 per cent).
Suburban newspapers and free-to-air television were the weakest sectors, the former shrinking by 1.l3 per cent while total TV grew 2 per cent - less than one-third of its 7.8 per cent growth in the previous period, with metropolitan TV advertising flat.
“(Free-to-air TV) is sort of unpredictable now,” Mr Holt said. “I really don't know why. TV still provides an excellent (advertising) platform.”
Newspapers were up by 2.9 per cent in total, with strong growth in Sundays, regionals and newspaper-inserted magazines propping up the sector.
MCU Price at posting:
63.5¢ Sentiment: Buy Disclosure: Held
