Declines in ad investment have been more modest in Canada than they are globally, according to the latest ad spending figures from SMI, but ongoing strength in digital is still not enough to make up for dips in traditional media.

Ad spending in March was down 3% year-over-year, following a 5% decline in February and 7% growth in January. Through all of Q1, ad demand is roughly flat year-over-year, down only 0.7%.

Darrick Li, VP at SMI, pointed out spending is still higher than pre-pandemic levels in both 2019 and 2020. The Canadian ad market also appears to be stronger than the U.S., which had a Q1 decline of 8%, its first since 2020.

“This is a great sign that the overall Canadian ad industry is healthy and isn’t experiencing the same levels of impact from an uncertain macroeconomic environment,” according to Yi. “That being said, recent February and March single-digit declines that have been driven by traditional media divestment is something that shouldn’t be ignored.”

Digital ad investment stayed at record levels in Q1, up 8% year-over-year and 21% compared to 2021. Even though traditional ad spending was down 11% year-over-year in Q1, out-of-home had the highest rate of growth at 25%. Digital video (24%) and search (14%) also had significant year-over-year growth in Q1.

In March, linear TV investment was down 16% year-over-year (though it still represents 31% of Canadian ad investment), with radio down 14% and newspapers down 2%, though out-of-home continued its growth streak at 18%. On the digital side, digital video was up 25% and search was up 13%. Display ads were down 6% in March, though the format still represents 28% of Canadian ad investment.

Looking at advertiser sector, CPG had a modest 2% year-over-year growth in ad investment, having a 22% share of spending in March. The fastest growth came from the automotive sector, which has turned spending around for 9% growth year-over-year, though it is still significantly behind its spending levels in 2021. Financial services, entertainment, travel, pharma and wellness advertisers also had modest single-digit increases in ad spending.

The biggest decline came from the technology sector, where spending was down 29% year-over-year. Restaurants (17%) and apparel (11%) also had significant year-over-year declines in ad investment, with general business and retail advertisers posting more modest declines.