Australia's retail sector continues to invest in digital media as it faces an increasingly disruptive market but there’s little agreement on the preferred digital media channel, the latest Standard Media Index (SMI) advertising payment data has revealed.
SMI’s data for the first quarter of 2017 shows the key retail sectors of department stores, discount stores, apparel/luxury fashion/Shoes have all continued to grow the amount spent on digital advertising.
However, the amounts spent and where it was spent differed markedly.
Although the apparel/luxury fashion category spends the least on digital media, of the three sectors it is growing the fastest with its digital ad spend jumping 73.6% in the quarter.
And interestingly, apparel retailers are the only category spending more on quality contents sites (mostly news-based websites) with both department and discount stores reducing their ad spend to this area in favour of the exchanges (or programmatic) market where advertising purchases are automated.
The growth in programmatic advertising was most pronounced within the department store category in this quarter with that ad spend quadrupling, while for discount stores the highest growth in ad spend was among pure play – mobile groups which specialise in in-app mobile advertising.
SMI AU/NZ MD Jane Schulze said the data again highlighted distinct differences in the digital media channels chosen by key retail sectors.
“Within SMI’s overall retail category data it’s clear there are distinct retail ecosystems, each with their preferred method of approaching digital media," she said.
“For example, department stores spend the greatest proportion of their digital media budget on social sites; discount stores spend the greatest proportion on search marketing while apparel retailers prefer quality content sites.
“The only commonality in ad spend trends we’ve seen in the most recent data is the reducing in spend onto pure play video sites, which may reflect some of the recent debate around advertising on brand-safe websites."
Schulze said the lack of consistency in approach to the digital market was interesting given the number of retailers in financial difficulty as new overseas entrants ramp up competition in the sector.
“Clearly the various retail sectors are continuing to test what works best as we can see that while apparel retailers are now spending the largest part of their digital advertising budgets on content sites, in the fourth quarter of 2016 most of their digital ad spend was directed to social sites,” she said.
“The digital media landscape continues to evolve at a rapid pace and SMI is the only company able to accurately track the movements in ad spend for these key categories across all digital sectors."
Schulze said SMI’s digital data is released each month on the 15th and then updated again later in the month to ensure all digital payments for the month have been collected.
“The industry has historically relied on advertising estimates to gauge category expenditure trends, but this is fraught in the digital world where campaigns are fed through automated exchanges and advertisers have the option of buying ads on a cost-per-click or cost-per-view basis. Estimates are therefore unreliable and only actual payment data can reveal true trends."