Ad Spending Falls in ‘09

Advertisers spent an estimated $117 billion on US media in 2009, a 9% drop from 2008, according to [pdf] figures released by The Nielsen Company.

Auto Spending Tanks
Spending on automotive-related ads dropped by more than one-fifth during 2009. Although automotive factory and dealership ads were still the number one product category for ad spending with $8.4 billion in 2009, this is 23.5% less than $10.5 billion spent in 2008. Local auto dealership ads, the number seven product category with $3.2 billion in 2009 ad spend, fell 23% from $4.2 billion spent in 2008.

Ad spending for number five product category wireless telephone services fell 8.2%, from $3.7 billion to $3.4 billion. Number 10 product category furniture stores saw ad spending fall 7.4%, from $1.5 billion to $1.4 billion. All other spending declines in other top 10 product categories for 2009 were less than 5%.

Three top 10 product categories experienced slight advertising increases in 2009. Ad spending for number four category department stores climbed 2.8%, from $3.9 billion to $4.1 billion, while for number two category pharmaceutical products it rose 1.8%, from $4.4 billion to $4.5 billion. In number three category quick service restaurants, ad spending rose 1.3%, from $4.01 billion to $4.07 billion.

Total ad spending on the top 10 product categories in 2009 fell 9.5%, from $39.9 billion to $36.1 billion.

Advertisers Go Cable
A look at 2009 ad spending trends by media category reveals that cable TV is growing in popularity with advertisers and print media is not quite dead yet. Ad spending in Spanish-language cable TV rose 32.2%, and ad spending in cable TV rose 14.5%. Free standing insert (FSI) coupons found in printed newspapers and magazines had an ad spending increase of 11.5%. Internet ad spending only grew 0.1%.

All other media categories rated by Nielsen experienced ad spending decreases in 2009, some severe. Ad spending in Sunday supplements dropped 44.9%, and B2B ad spending fell 32.7%. The other media category with an ad spending decline of more than 20% was local magazine, 23.9%. In total, ad spending across all media categories fell 9% in 2009.

Ad Spending Decline Slows
Thanks in part to a relatively strong fourth quarter where ad spending only declined 2%, the 9% decline was an improvement from the pace of ad spending reported earlier in the year. Spending was down 15.4% through the first six months of 2009 and 11.5% after the first three quarters. Ad spending fell for six straight quarters between Q3 2008 and Q4 2009.

US Online Display Advertising Grows 21%
Despite the paltry increase in spending on internet ads in 2009, US internet users viewed a total of 4.3 trillion display ads from December 2008-November 2009, representing a growth rate of 21% from a year earlier, according to comScore. These gains were driven by an 8% increase in the number of people exposed to display ads online and a 12% increase in average frequency.

Mobile phone network providers AT&T Inc. (84.3 billion ad impressions) and Verizon (56.8 billion impressions) ranked as the top US online display advertisers from December 2008 – November 2009, while Sprint also ranked in the top ten with 26.2 billion impressions.