Marginal growth is the new normal for advertisers

The trend of anticipating extremely moderate market growth continues in 2013, with media executives less optimistic about budget growth when compared to advertisers – predicting only 1.2% and 1.7% increases in budgets respectively – according to the latest Starcom MediaVest Group Media Futures survey.

The media sectors likely to buck the overall trend are online search (up 14.5%), display (up 9.4%) and mobile (11.6%) as the internet advertising market continues to outperform more established media channels. Newspapers, magazines and out-of-home are forecast to be the hardest hit media this year, with falls of 3.2%, 2.5% and 2.9% respectively.

While most advertisers (92%) used online display advertising in 2012, FTA TV was still the most frequently used medium and 85% of advertisers say they will use FTA primary channels again in 2013.

Says John Sintras, Starcom MediaVest Group chairman: “As I’ve said before, this very marginal growth is the ‘new normal’ and it’s a continuation of a trend we’ve seen for the past few years.”

Media executives anticipate the biggest uplift in TV revenues will come from sports and special events. Government and automotive are predicted to be the best performing categories with 67% and 62% of executives anticipating growth in these categories respectively. Retail, finance and telecommunications are also likely to see an increase in spending. On the other hand, budgets for FMCG and food are expected to decrease substantially.

Says Sintras: “We’re heading into a new Federal election cycle in 2013 and we expect this will have a positive effect, especially on FTA TV advertising.

“With Nine and Fox Sports paying a record price for NRL rights, and with the AFL being ever popular around the country, it’s no surprise that sports will be what drives TV revenue in 2013.

“Online media across all platforms continues to outperform the more established channels in terms of revenue growth. The availability and quality of performance data, allowing real-time optimisation and industry leading ROI evaluation will only see this trend continue.”

In terms of “below-the-line” media, almost three quarters of marketers used public relations in 2012 and anticipate they will do the same in 2013. Mobile internet is the big growth medium, with 32% of marketers saying they will use it this year, compared with 25% in 2012. Catalogues, unaddressed direct mail, exhibitions and branded content are all likely to see budgets contract.

Starcom MediaVest will revisit the Media Futures survey later in the year to compare expectations with actual spend in the first half of 2013 and to recalibrate growth rates for the whole of 2013.