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Retailers increase ad spend by $90 million

New data from Standard Media Index (SMI) shows Australian retailers spent $90 million more on advertising in the 2017 financial year than in the previous financial year.

This was the biggest increase in advertising spend in an product category, providing 9 per cent of all advertising in FY17.

In terms of total size, retail is topped only by the automotive sector, which remains the market’s biggest product category, providing 11 per cent of all advertising.

SMI shows the biggest fall in ad spend was recorded by the government category following the huge spike in ad spend due to the Federal Election last year.

Ad spend in food/produce/dairy and the media categories also declined.

“The large increase in advertising investment by retailers is clearly due to the intense battle in the supermarket category, as well as the imminent entry of Amazon which will see a surge in retail advertising activity,” said Jane Schulze, managing director of SMI Australia and New Zealand.

Retailers have helped the market deliver its fifth consecutive year of record financial year ad spend in 2016/17 to reach in excess of $7.1 billion.

The SMI data also showed the fastest growing media sectors in FY17 compared to the previous corresponding period.

Digital programmatic exchanges recorded the biggest increase in ad spend of all sectors, jumping 67.3 per cent to $338 million, followed by social sites up 20.8 per cent to $229 million and posters/billboards up 18 per cent to $338 million.

Other sectors to quickly grow ad spend in the year were sporting venues (up 12.8 per cent), search affiliates (up 9.6 per cent) and street furniture (up 6.1 per cent).

Among the major media, television remained by far the preferred media for retail advertisers with total ad spend growing 13.2 per cent to $268.4 million.

But the fastest growth in retail ad spending was in outdoor where total bookings lifted 50.2 per cent to $54.2 million, followed by digital where retail ad spend grew 29.1 per cent to $153.8 million.

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