Wesfarmers, Woolworths and Harvey Norman have once again emerged as among the nation’s top advertisers, but overall spending has dropped over the last year as the advertising market was hit hard by the financial crisis, a new Nielsen report has revealed.
Among the biggest cost cutters are Telstra and Qantas, which have slashed their budgets by 41.7% and 17.4% respectively, while Unilever and department store Myer saw costs increased by 33.5% and 14.3% respectively.
The report, which covers advertisements in all areas of media expect pay television, regional radio, suburban newspapers and online search and classifieds, has revealed that 17 of the top 25 cut their budgets over the past year.
Peter Cornelius, managing director of media in Nielsen’s Pacific region, said in the report total media advertisement spending dropped by 8.2% last year.
“Advertising spending [in Australia] entered the downturn later than most global markets and also lagged behind Australia’s emerging economic upturn in 2009,” he told the AFR.
“By late 2008 and early 2009, the majority of marketing sectors had initiated ad spend cutbacks. This was particularly evident among the GFC-vulnerable categories such as motor vehicles, telecommunications, insurance and finance.”
The top advertiser, Wesfarmers, has actually dropped its advertising budget by 8.3% to between $205-210 million. Woolworths increased its spending by 2% to $140-145 million, while Harvey Norman actually dropped its budget by 1.4% to $135-140 million.
Other increases occurred at Unilever, which raised spending by 33.5%, McDonald’s, Sony and Nestle.
Telstra cut its budget by the most at 41.7% to $100-105 million, followed by Qantas which slashed its spending by 17.4% to $50-55 million. Both the New South Wales and Victorian governments dropped their budgets by about 22.3% and 2.4% respectively, while Suncorp dropped its budget by 13.2% to $70-75 million.
Vodafone Hutchison Australia managed to cut its budget by 9.8% to $50-55 million, while Lion Nathan National Foods also dropped 9.6% to $45-50 million. SingTel also dropped 11.1% to $70-75 million.
The cost-saving trend occurred across the board in all categories, with only seven out of 39 recording an increase. The non-alcoholic beverages category recorded the largest increase of 18%, followed by gambling and gaming up 10% and food up 8%.
Motor vehicle advertising spending dropped 16% to a collective $930 million. Only one major manufacturer, Toyota, entered the top 25 with a budget of between $65-70 million.
Cornelius said in the report that while there are no forecasts included in the report, there are still “very positive signs of advertising growth”.
“Advertising trends across most media in the early stages of 2010 indicate real growth year on year, albeit comparing with a downward trend in 2009.”
The top 25 (spending in $m)
1. Wesfarmers – $205-210
2. Woolworths – $140-145
3. Harvey Norman – $135-140
4. Federal Government – $125-130
5. Nestle/L’Oreal – $120 – 125
6. Telstra – $100-105
7. Victorian Government – $90-95
8. Unilever – $70-75
9. New South Wales Government – $70-75
10. Suncorp – $70-75
11. SingTel – $70-75
12. Commonwealth Bank – $65-70
13. Toyota – $65-70
14. Myer – $60-65
15. Reckitt Benckiser – $60-65
16. Village Roadshow – $55-60
17. Queensland Government – $55-60
18. McDonald’s – $55-60
19. Westpac – $55-60
20. Procter & Gamble $55-60
21. Qantas – $50-55
22. Vodafone Hutchison – $50-55
23. ANZ Banking Group – $45-50
24. Lion Nathan National Foods – $45-50
25. Sony – $45-50
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
