Nine Entertainment: SMI Data Shows Digital Continuing to Hoover Up Ad Revenue

The Standard Media Index (SMI) released industry data which reveals where advertisers are allocating their expenditure to access audiences. The Australian advertising market remains relatively benign reflecting weak macro-economic conditions. Total spend for fiscal 2014 increased by 1.9%. With inflation running at 2.9% the real rate of growth remains negative. Overall industry expenditure for fiscal 2014 is recorded at AUD 7.5 billion. Print advertising has recorded double digit declines with metropolitan newspapers down 19% and magazines down 17%. Digital remains the winner taking share away from print and recording a 21% increase in expenditure. Television recorded a 1.5% increase to AUD 3.6 billion with metropolitan television up 1.8% to AUD 2.6 billion. Industry growth is in line with our forecast for fiscal 2014 and we expect growth to remain in the low single digits over our forecast period. This reflects our view that the Internet will increasingly fragment audiences. The exception is sizable consolidated television audiences for sport and popular proprietary content, which will help to offset this fragmentation.