Speaking Sensis

The last six months of 2009 was a mixed bag for the Australian media market. While a number of media are experiencing real challenges, the sector as a whole showed slight improvement in the December half, with the Internet and TV (particularly pay TV) being the big winners.

So, do you like a good roller coaster? Well, the ad industry has a pearler for you.

According to the December 2009 CEASA Report – the ‘bible’ of revenue in the Australian main media market – the GFC gave the ad industry a not unexpected whacking in 2009. Advertising expenditure (covering newspapers, magazines, directories, TV, radio, online, outdoor and cinema) fell by 8% during 2009 to about $12.6bn.

Ouch.

Mind you, just like all good roller coasters, just when the slippery slope looks like slamming you into the soil, up you go again. The CEASA report pointed to a slight improvement in the December half. And while things still looked weak, they weren’t quite as bad (in most places) as the June half, suggesting a recovery maybe in play.

To reinforce this trend, the latest SMI report, which came out a few days ago, suggested that the media market gathered the upward force of your average space shuttle in the March quarter, with growth of approximately 10% compared to the same time last year. Mind you, the SMI report doesn’t cover the full market in the way CEASA does, so you can’t directly compare the results.

While this is good news for a media sector that did it tough during 2009, the champagne corks aren’t popping everywhere. In fact, when you look under the hood, you find that the results across different sectors of the ad industry are going up and down like a … well, this is a family blog.

So who were the big winners and losers in 2009?

The Ups

Not surprisingly, online was the only major sector to grow in 2009, although it clearly wasn’t a great year by Internet standards. In fact, the industry looked quite weak in the July and September quarters before staging a strong recovery in December.

And, although it still declined by 6% for the year, TV – that other big screen – was also a winner. That’s because TV did a lot better in December (down 2.9%) than June (down 10.6%). This result was heavily supported by pay TV, which grew by 5% for the year.

In fact, TV revenue did so well compared to other the rest of the market that it actually out-muscled newspapers in 2009 to become Australia’s highest earning media sector, possibly for the first time in history.

The Downs

Of course, what goes up must come down … and there’s a few different media that lost big in 2009.

Newspapers were down almost 16% in 2009, although, like TV, they showed a reasonable overall improvement in the December half. But suburban newspapers defied that trend: the 21% decline they experienced in the December half was actually worse than June.

The other big loser was the magazine sector, which went from a 9% decline in the June half to a 26% decline in December.

But the really big loser has got to be classifieds. All newspaper and magazine revenues tend to be a mix of display advertising and classifieds. And while the display ads didn’t do too badly (national newspaper ads were down 5.6% for the year), classifieds took a bath, with newspaper classifieds down 32% and magazine classifieds down a blood curdling 45% (although they are a small part of the overall magazine revenue base).

Directories down? Well, yes… but not all is as it seems

The other segment that was down in the December half was classified directories, which includes print directories and used to also include The Trading Post print. Although there’s some pretty clear reasons why.

Firstly, the Trading Post print publication was closed during the year. This of course heavily impacts the result.

Secondly, Yellow Pages® and White Pages® print revenues are recognised in our accounts mainly in the half of the year following the sale. So the decline you’re seeing in print directories was actually the decline in sales experienced in the June half, when everyone else also fell.

So that’s it:
•    A media industry that’s coming out of the GFC with what looks like a sudden growth spurt in the first three months of this year;
•    And results across the industry that are so topsy turvy they’ll have your cheeks flopping about like a parachutists’ in no time.

Which leaves me with one final question.

Can someone please pass me that brown paper bag?