October 2025 became known as “Red October” after Australia’s media agency market recorded a sudden 14.7% year‑on‑year decline in advertising spend.
Only digital video (‑3.9%) and out‑of‑home (‑5.9%) avoided double‑digit falls. Over 90% of the decline came from just 10 product categories, dragging the broader market down despite year‑to‑date ad spend remaining marginally positive.
The numbers paint a picture of broad decline, but underlying drivers tell us more.
A handful of big advertisers hit the brakes. Food, produce and dairy brands slashed budgets by 29.5%. Government advertising plunged 31.2%. Communications and other major categories also pulled back. Guideline SMI’s Jane Ractliffe said 90% of October’s decline was concentrated in just ten categories.
Consumer caution squeezed discretionary categories. Cost‑of‑living pressures, high interest rates and volatile consumer sentiment weighed on categories like Food/Produce/Dairy and Toiletries/Cosmetics. An AdNews analysis of September’s 10.4% decline (a precursor to Red October) noted a tightening of consumer discretionary spending across 2024 and 2025. More borrowers refinanced mortgages and insurance premiums rose, signalling households were under financial pressure.
Retail media siphoned budgets. Media buyers observed that retail media’s growth is “hoovering up dollars”. Brands with tight budgets diverted spend to in‑store and online retail networks, reducing traditional media investment.
Post‑election hangover and tough comparatives. A record Federal election and Olympics drove huge ad spend in 2024. When that activity disappeared, year‑on‑year comparisons looked severe. Government advertising naturally dried up after the election, and September was already down due to the post‑election slump.
Economic uncertainty breeds caution. Macroeconomic headwinds like global trade tensions and inflation had advertisers tightening belts. Marketing budgets are increasingly tied to ROI and efficiency; with higher costs across supply chains, advertisers trimmed campaigns or delayed launches.
Shift to digital and performance. Traditional free‑to‑air TV revenues are under pressure as budgets migrate to digital and outdoor. Guideline SMI data shows free‑to‑air TV ad revenue fell nearly 10% in 2025 while billboard and digital advertising grew 13%. Brands favour platforms that offer targeting, measurement and flexibility, leaving legacy channels to bear the brunt of cuts.
Not everything was bleak. Insurance advertising bucked the trend, soaring 21% in October. Streaming video platforms grew 1.9%, and outdoor remained the most resilient major channel (‑5.9%). Year‑to‑date ad spend stayed positive (+0.2%) thanks to earlier gains in digital and outdoor. These bright spots highlight where audiences and advertisers are gravitating – premium digital video, streaming audio and high‑impact outdoor placements.
“Red October” isn’t just a cautionary tale; it’s a reminder that strategy matters most when the market goes quiet.
Double down on understanding your audience. When budgets are tight, every dollar must work harder. Use first‑party data and predictive tools to identify and prioritise high‑value segments. Media partners who combine gut instinct with machine intelligence can help you model outcomes and allocate spend more effectively.
Reassess channel roles. Big emotional storytelling still belongs on TV and audio, but high‑intent actions are best served by frictionless digital and retail media. Align each channel to its purpose rather than spreading budgets thin across everything.
Test and learn continuously. Instead of waiting for wrap‑ups, build testing loops into campaigns from day one. Pilots, geo splits and holdouts help prove value and guide investment.
Look beyond ROAS. Measure what matters: revenue attribution, brand lift, margin impact and customer lifetime value. Clicks and impressions don’t pay the bills.
Think long‑term. Economic cycles ebb and flow. Brands that stay present during downturns often emerge with greater share of voice. While categories like food and government cut back, resilient players in insurance, retail and streaming are capitalising on lower clutter.
Red October shows how quickly markets can turn and why over‑reliance on a few big categories is risky. But it also underscores the opportunity: when competitors cut back, brands with a sharp strategy can stand out, build brand equity and capture share. Media Matters will continue to bring you insights that cut through the noise and help you make media decisions that matter. Stay tuned for next month’s issue, where we’ll dive into the rise of retail media networks and what they mean for your brand.
