How much should I spend on Digital Advertising?

This is a question often heard from clients. Although prior to the arrival of Digital we were never asked how much should be spent on a particular media such as Radio, Print, TV, etc. Ideally, the question should simply be “how much should I spend on advertising”? However, to answer the specific Digital question, we have looked at Digital as four distinct budgets – Search (SEM), Online Classifieds, Optimising a website (SEO) and a ‘Display’ budget.
SEM seems to be a mandatory for the majority of clients and is effectively today’s equivalent of the Yellow Pages.  As SEM directly relates to a specific search (albeit product name or category interest), clients should establish the ‘cost per acquisition’ (CPA) they are prepared to pay and limit spend on SEM to that CPA. The budget effectively sets itself.  Interestingly, in days gone by Yellow Pages ads were predominantly booked direct by clients and didn’t come out of the Ad agency budget. As a guide, SEM presently accounts for close to 40% of all Online Advertising*.
Online Classified advertising relates to very specific sales sites such as cars, property, jobs, etc.  If you are a retailer in those industries then Online Classified advertising is probably again mandatory.  It is also likely that it could take up the vast majority of those clients’ budgets.  Within the total Digital advertising spend, Online Classifieds makes up around 19%*.
SEO is a cost that arguably could be classified as part of the ‘Communications’ budget on a P&L as opposed to coming out of an advertising budget.  Adjusting / optimising a website to rank higher naturally on Google searches seems more related to ‘communication to clients’ than brand building.  The objective of SEO is to influence Google’s algorithms and open a window to the company, not to build a brand.    
Within ‘Display’ we’re including Static, Video and Paid Social. The question of how much to spend on Display naturally changes from client to client. Some clients spend 100% of their budget on digital although they tend to be smaller clients with smaller advertising budgets.  Looking at SMI Data** the Display activity for clients is sitting at around 20% of all advertising spend.  This figure has grown at around 2% share each year for the last 10 years.  For most clients with an ad budget greater than $500,000 it seems that 15-20% is the norm for Display. It must be stressed this is simply an average not a recommendation. The Industries** spending the highest proportion of their budgets in Display are Banking (around 30%+) and Insurance, Travel & Automotive who each spend approx. 25%.
Display Digital is just another media channel and should be treated on its merits like any other in terms of what it can arguably contribute for a client. Every medium needs to be measured and made accountable for what it does for a Brand, whether that’s lifting awareness and brand recognition, generating leads, increasing foot traffic, making sales or whatever the marketing strategy calls for.  Unfortunately Online & Offline advertising is often sectioned off and looked after by different people or companies.  It is no surprise that each person or company will most likely recommend a higher proportion of spend in the medium they know best.  The best media plans will always be achieved from a holistic and unbiased overview of each and every media.
*Source: IAB Australia March 2019
**SMI: sourced from the major media buying agencies in Australia


Network 10

According to Rod Prosser (TEN’s Chief Sales Officer) – CBS are looking to use Australia as a “test bed” for new formats. We are being told programming will be more cohesive and should (famous last words) improve overall performance in terms of consistency and ratings.
New local content – My Life is Murder, One Born Every Minute, Sydney’s Crazy Rich Asians, The Amazing Race.
New overseas – Beecham House and Masked Singer.
Returning – Bachelor, Bachelorette, Survivor, Playing For Keeps, Trial By Kyle, Gogglebox, Pilot Week testing
Just on air now – Body Hack,  Five Bedrooms, Taboo, & Kinnie.
Clearly TEN are maintaining their return to the under 50s target, something they did well for many years over a decade ago.
Now they need to deliver on programming, on audience and ultimately for the Network on revenue. We will be keeping a keen eye on the second half of 2019 to see what happens.


It’s School Holidays, but where are the kids?

So it’s school holidays, and chances are instead of your kids being outside jumping in puddles, they are on their phones using their favourite app ‘Tik Tok’, the App formerly known as Musically. Essentially it is a video sharing app (user generated like YouTube used to be), where kids tape themselves being silly or generally showing off (often set to music) and broadcast it to their friends or to the world at large. If the consumer enjoys the content they can like, comment or befriend the user. Or they can swipe up and see how the next kid will entertain them.
The latest forecasts for Asia Pacific by market research group Forrester shows the popularity of TikTok is spreading with more than 700 million monthly active users globally. There are already 200 Million users alone in India (compared to 300 Million on Facebook). The app is currently available in 150 markets, in 75 languages, and has been ramping up its presence in Australia.
Other short-form video apps such as Vine have shut despite their popularity due to their failure to find a revenue stream. However TikTok managed to monetise it’s offering within one year of its launch through a variety of revenue models like in-app purchase of coins and virtual gifts, but advertising accounts for most of its revenue. Brands are increasingly collaborating with TikTok to reach younger consumers in Asia
Nielsen states that the platforms active users in Australia are at 67,000 in April. The App’s search volume* grows significantly during the school holidays, and although the minimum age is 13, the age gateway doesn’t require proof, so even your young kids (7-12yo) just need to download and sign-in to get on-board.

*Google Trends (April 2019)

Like every new emerging platform, advertisers can engage with these audiences, by creating native ads and target audiences within the platform itself (self-service). Needless to say your ad (preferably video ad) needs to be entertaining enough so these Gen Z audiences don’t swipe up (ignore your advertisement and continue with their digital lives)


SMI Graph

The June’19 SMI figures are ‘hot off the press’ and enable us to compare FY19 to FY18.  However, late Digital bookings still need to be added so the FY19 figures are somewhat under reported. FY19 also does not include Federal Government spend whilst FY18 does. 
From Sep17-Aug18 SMI showed 12 consecutive months of increased advertising spend.  On the other hand, the Oct18-Apr19 months were not kind to most media with declining advertising spend at around -5.5% per month. The good news is the May & June months seem to indicate some improvement in advertising spend.
Overall, if we assume $50mil of late Digital bookings and allow for past Federal Government spend, it is reasonable to say the FY19 total spend looks to be at least the same as FY18. In other words, the yearly advertising spend is relatively static – not decreasing or increasing to any degree.
One surprise in the figures is Outdoor has had a poor Jan-Jun19 period being down -1.5% for the six months. The Outdoor medium has grown for 9 consecutive years and still has the highest increase (+4.1%) of all media for FY19 but this is Outdoor’s lowest increase since FY14. 


  1. 2GB is the No1. Station in Sydney at 14% share, however Smooth has 1,051,000 weekly listeners in the last week with 2GB having 677,000
  2. Magazines are still launching! Pac Mags launch “New Idea ROYALS” this month after Bauer launched “It’s Your Day” in June. Universal have also launched “Well Being Wild” and “Being”.
  3. New Large Format Digital posters are being erected outside Westfield Shopping centres managed by JCDecaux
  4. Ninja Warrior is holding it’s audience after a strong Monday night of just under 1.3M Nationally
  5. The US Federal Trade Commission has voted to fine Facebook around $US5 billion ($7.1 billion) over violations of previous commitments to protect user privacy
  6. is the top shopping website with 68,200,000 monthly visits and a high pages per view of 9.8.