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US Ad Spending Saw 15% Decline in Early 09


US Ad Spending Saw 15% Decline in Early '09

However, Some Categories Saw Significant Increases

A report from Nielsen indicates that ad spending in the United States fell 15.4% in the first half of the year, compared to the first half of last year. Preliminary estimates show that US ad expenditures fell over $10.3 billion to a total of $56.9 billion.

"While some of the larger categories have cut back spending, we see others that continue to raise the ante on their media investments," said Annie Touliatos, VP for Nielsen’s advertising information services.

"What’s interesting is that we’re not just seeing a rise in spending for recession-friendly products like fast food restaurants," added Touliatos. "We're seeing a lot more promotion of technological innovations like smartphones, computer software, and consumer-driven web sites. These advertisers see potential for their products despite our stressed economy and are leveraging advertising to drive their success."

Following is a look at the
year-to-year change in ad spend, by media:


As you can see, Cable advertising was the only category to show any growth. Interestingly enough, major cable networks are working on taking advertisers' campaigns online.

Here is a look at the
top product categories, by ad spend:


Automotive ad spending was still significantly higher than the rest, even though it dropped by 31% year-over-year. Fast food ad spending saw a nice increase.

Outside of the top 10 listed above, Nielsen says there was significant growth among other major product categories, like multi-function mobile phones, cable TV services, websites, tax services, software, insurance, legal service, etc.


5. US media lose $10bn advertising in first half

More than $10bn in advertising disappeared from US media markets in the first six months of this year, according to new data that show intense pressure on media owners and ad agencies as they search for other business models.

Preliminary figures from Nielsen show a 15.4 per cent year-on-year decline in US advertising revenues, the largest drop for any period in the decade since the marketing and media measurement group began compiling such reports.

The study showed sharp differences in the behaviour of different media and product categories, with cable television the only medium on which ad spend increased, up 1.5 per cent across English language channels and up 0.6 per cent for Spanish channels.

By contrast “spot” advertising, booked at short notice, fell by 17.4 per cent in the top 100 local TV markets and by 32.1 per cent in the 110 next largest markets. Even internet advertising, from which Nielsen’s excludes search engine spending, slipped 1 per cent.

Newspapers, for some time the weakest media performers because of the online migration of classified advertising, turned in further heavy declines. Local and national newspapers saw 13.2 per cent and 22.8 per cent falls respectively, as Sunday supplement advertising dropped 22.4 per cent nationally and 45.7 per cent locally.

Magazines fared no better, with falls of 21.2 per cent for national titles, 25.4 per cent for local brands and 31.8 per cent for business-to-business magazines.

Changing spending patterns among the largest advertising groups highlighted economic pressures, with carmakers cutting budgets by 31.4 per cent to $3.68bn and local dealers cutting by 26.2 per cent to $1.69bn.

Growth came instead from “as seen on TV” direct response products, typically sold through “infomercials”, which increased spending by 6.7 per cent to $1.26bn. Fast food restaurants overtook drug companies as the second-biggest spenders, with a 5.1 per cent increase to $2.2bn.

Annie Touliatos, of Niel­sen’s, said: “What’s interesting is that we’re not just seeing a rise in spending for recession-friendly products like fast food restaurants. We’re seeing a lot more promotion of technological innovations like smartphones, computer software and consumer-driven websites.”

Advertising for multi-function smartphones more than doubled, boosted by heavy ads for Apple handsets even before the July launch of the iPhone 3G S.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web




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