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SBD Global/August 10, 2012/Olympics

Olympics Boost Ad Spending In Australia, Foxtel Waiting To Assess Results

Marketing and communications company STW Group has warned that a boost in advertising spending during the London Games "will result in the market being cannibalised later in the year as marketers pare back spending," according to Simon Canning of THE AUSTRALIAN. STW posted a net profit rise of 4.7% to $18M in its half-year result "that was in line with analysts expectations." STW noted that the Olympics "would have a significant impact on media spending this year, while magazines and newspapers would continue to see advertising decline." STW's media buying agency Ikon CEO Dan Johns said that there was an estimated $130M "shortfall in media spending so far this year compared to estimates of where the market would be," with predictions of 5% growth scaled back to between 1.5% and 2%. Johns: "It does not look like the Olympics is generating incremental revenue into the marketplace. These budgets are coming from other areas so it's going to squeeze different parts of the year" (THE AUSTRALIAN, 8/10).

OLYMPICS EFFECT TBD: Meanwhile in Sydney, Julian Lee reported subscriber growth at News Corp.'s Foxtel "remained subdued and has slowed over the past year" as the pay-TV company posted an 8.5% growth in earnings to $598M. Foxtel said, however, that the "full impact of the London Games on the business" will remain unknown for another two months. Foxtel was a joint bidder with the Nine network for the rights to broadcast the Olympics to Australian viewers. It split the $120M bill for the London Games and '10 Vancouver Games between itself and the free-to-air broadcaster and has put on "eight dedicated channels for round-the-clock coverage." A Foxtel spokesperson said, ‘‘We will be evaluating that in the next two months. We have seen a tick up in subscriber numbers. I won’t say it is huge but it is certainly noticeable. We have also seen an increase in the number of people who are taking our sports pack, which is encouraging" (SYDNEY MORNING HERALD, 8/9).
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Olympics, United Kingdom, Australia

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