|The Australian advertising market grew at the rate of 13.7 per cent last year, to $12.4 billion and auditing firm PwC has been forced to revise its annual Entertainment and Media Outlook report for the first time to reflect a rise in demand for traditional media.
The out-of-home sector, which had been tipped to grow by 4.1 per cent to $416 million but was up 25.7 per cent to $503m -- slightly above the outdoor industry's own figure of $477m according to the report covered in The Australian.
Free-to-air television revenues smashed the 6.8 per cent forecast to grow by 16.6 per cent to $3.675bn last year. Cinema rose 16.5 per cent to $104m, well above the 2.2 per cent predicted.
With no official TV figures released to the market for 2010, the PwC forecast, which now incorporates data from advertising measurement firm SMI, is one of the first to put a value on total free-to-air TV advertising revenues for last year, along with magazines and newspapers.
Consumer magazines were the only sector underperforming the company's traditionally conservative predictions, growing by just 1.7 per cent to $657m -- well under the 2.2 per cent benchmark set.
Newspaper advertising revenues rose 9.7 per cent to $3.808bn, almost three times the 3.5 per cent predicted.
Growth in internet advertising also out-paced its already high forecast 17 per cent growth rate, while pay-TV advertising revenues tripled initial estimates, growing 18.4 per cent to $394m despite a slowdown in subscriptions.
"Advertising revenues across nearly every sector bounced back more vigorously than even the greatest optimists expected," the PwC report states.
"With well-thought-out programming, the (free-to-air) digital multi-channels have delivered more viewers and more targeted environments for advertisers.
"The issue (for) 2011 is whether the free-to-air networks will be able to secure rate rises for their digital multi-channels, as they have been discounted by as much as 40 per cent."
The turnaround in newspaper advertising is attributable to the medium's continuing mass reach despite circulation pressures, while the relative lack of momentum in magazine advertising is due to long printing lead times, a lack of exposure to retail advertising and the fragmentation of the market, the report suggests.
PwC predicted the advertising industry would grow by 3.5 per cent this year, which is at the conservative end of predictions made by other advertising forecasters, which fluctuate between 3 and 8 per cent.
The buoyant state of the overall advertising industry was also reflected in a higher five-year outlook: PwC revised its average annual growth rates up from 5.3 per cent to 6.1 per cent, which would take the industry to $14.693bn.
Last year's report had predicted internet advertising would overtake newspapers and television in 2014 to become Australia's biggest media sector, but the new figures continue to rank it third, with free-to-air TV instead taking the top spot with $4.197bn. That was ahead of newspapers' $3.866bn and the internet's $3.846bn.
Outdoor was also the big improver over the five-year period, with PwC lifting its compound annual growth forecast from 3.6 per cent to 7 per cent, taking it to $560m.
Magazines were the only sector tipped to underperform PwC's previous forecast over the five-year period, shrinking 0.1 per cent on average to be worth $642m in 2014. Newspapers, which had been tipped to grow 1.9 per cent, were revised slightly upwards to 2.2 per cent.
Source: The Australian
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