February ad spend grows 3.3%
The SMI latest ad spend figures marks more than a year of consecutive monthly growth for Australia, approaching 2018 record highs. Ad spend, as measured by media agency bookings, reached $595.7 million overtaking the previous year. Whilst 2021 February figures had been fuelled by the Australian Open broadcast, 2022 marks a revived growth in ad spend without the bolster of major events.
This increase extended to search cost-per-click, which grew massively by 24% YoY for the month of February as well as social cost-per-click, up 21% YoY for the month of February.
What’s driving these increases?
SMI results come after a steady increase in overall performance platform costs for the last 12 months as Australia settles into the post-pandemic era.
Whilst January experienced a strong start in retail, February represented a setback in consumer spending. Given the global economic uncertainty, recent increases in fuel prices and impending changes to interest rates, this dip most likely forecasts trends to come as Australia navigates the current climate.
To combat this decrease in consumer spending, we saw advertisers try to funnel more budget into performance channels to ensure total revenue targets were hit. This inherently increases competition, driving costs and growing ad spend overall.
Amidst this cultural climate, we are also witnessing a decrease in Facebook users for the first time in 18 year. A touchstone of digital marketing strategy, this hit to Facebook has shaped how advertisers spend, now experiencing small audiences than ever before. This dip in audiences has served to drive the competition for attention, impacting the paid ads operate.
What can we do about it?
With reference to the current climate and consumer culture, we can predict the decline of February could mark the trend in digital advertising for 2022. Acting with agility and creativity is key to withstanding the buoyancy of the current market.
Brand-building strategies remain an increasingly valuable tool to power long-term growth. The use of diverse content marketing from online video to audio can boost ad-spends with the support of customer engagement, acquisition and retention.
By pivoting your strategies to look beyond clinks, you can begin to understand engagement beyond pure performance play. By refocusing on higher in the funnel, you can astutely make use of your paid-ad strategy within the current circumstances.
As we witness the decline of Meta across Facebook and Instagram, with ad dollars expected to fall an estimated $3bn in Q1 2022, there has never been a better time to diversify your platform strategy. As social platforms like TikTok, Snapchat & Pinterest emerge as the new frontier of digital strategy, now is the opportunity to expand your reach and variate your strategy.