Q4 Slowdown First Since 2009
The Kantar Media figures pegged total US advertising expenditures for 2011 at $144 billion, with spending growth slowing throughout the year before dropping 1% in Q4 compared to a year earlier, the first quarterly decline since the end of 2009. Spending among the 10 largest advertisers in 2011 was roughly $16 billion, representing a 2.8% decline compared to the previous year. Procter & Gamble maintained its top-ranked position for the ninth consecutive year with spending of $2.95 billion, down 5.4% compared to 2010.
Meanwhile, expenditures for the 10 largest categories grew 3.3% in 2011, to $81.6 billion. Automotive was the top category with $13.89 billion of spending, up 6.3% from 2010. Insurance registered the largest growth rate among the top 10 categories, with a 13.5% gain to $5.52 billion.
More Q4 results from Kantar Media can be found below alongside the detailed MagnaGlobal figures, while Q3 results from Kantar Media can be found here.
Data by Media Type
According to MagnaGlobal, TV advertising revenues (including P&O) fell 2.3% in Q4. On a normalized basis (excluding P&O), revenues grew 5.4% for the year overall. Due to the absence of Olympics and low political activity in 2011, when factoring in P&O, TV revenue grew by a more muted 1.2% for the year.
According to Kantar Media, TV continued to lead the ad market in the fourth quarter. Network TV expenditures grew 7.7% year-over-year for the quarter, while the rate of cable growth eased, finishing at 2.4%. For the full year, network TV decreased by 2% while cable rose 7.7%.
In other Kantar figures, Spanish language TV ad spending surged 19.1% in fourth quarter, and increased 8.3% for 2011 overall. Syndicated TV benefited from higher spending by department stores and health & beauty brands and saw expenditures soar 11% in Q4, with full year spending up by 15.4%. Spot TV expenditures fell 8.7% in Q4, but the more significant indicator was that November and December spending were each down, despite easy comparisons against diminished, post-election spending volume of a year ago. Full year Spot TV spending dropped 4.5%.
Data from the MagnaGlobal report indicates that TV revenues (excluding P&O) will grow 1.8% in 2012, with national TV (2.3%) growing faster than local TV (0.8%). However, MagnaGlobal believes that political advertising will generate $2.5 billion in expenditures, boosting local station ad revenue. As a result, including P&O, local station revenues will grow 10.4%, while national TV revenues will rise 3.9%.
A February 2012 report from Strategy Analytics predicted US TV advertising revenues to grow 3.7% in 2012 to occupy a 41% share of total US advertising revenue. Global TV advertising revenue growth is predicted to be 5%, reaching $188.5 billion, equal to 40% of global spending.
The MagnaGlobal report indicates that internet ad spend was up 18.8% in Q4 2011, and 21.2% for the year, representing faster growth than the 12.6% increase posted in 2010. On a full-year basis, internet media reached a market share of 18.4%. Mobile internet ad revenue grew 149% in 2011 to roughly $1.6 billion, representing 5% of total internet advertising.
Data from the Kantar Media report indicates that ad spending on the internet fell 6.2% in Q4, and overall spending for the year grew a marginal 0.4%. Paid search budgets in Q4 were 6.4% lower compared to a year ago, with continuing reductions from financial, insurance and local service advertisers. Display investments fell 5.9% in Q4, dragged down by smaller budgets from auto manufacturers, telecom providers and travel companies. For the entire year, paid search spending declined 2.8% and display increased 5.5%.
Full details from the IAB’s April 2012 report, which showed online advertising revenues reaching a record $31.7 billion in 2011, at a 21.9% year-over-year growth rate, can be found here.
MagnaGlobal expects internet media spending to grow 12.2% this year to reach $35.6 billion, and a 20.2% market share. The spending will be driven by paid search, which will post double-digit growth, as well as mobile advertising (53.1% growth to $2.4 billion), and online video (24% growth to $2.2 billion).
Strategy Analytics predicts that online advertising revenue will grow by 6.7% in the US, to account for 18% share of revenue. This is slower growth than the 11.7% increase forecast for Europe, where online is expected to account for 20.4% of all advertising revenue.
These figures are less aggressive than recent eMarketer estimates of US online ad spend growing by 23.3% this year, with double-digit growth continuing through 2014 before slowing to 8.9% in 2015 and 7.8% in 2016.
According to December 2011 data from Zenith Optimedia, internet advertising will increase its share of the global ad market from 15.9% in 2011 to 21.2% in 2014.
A more detailed breakdown of US online advertising revenues can be found here.
Magazine ad spending dropped 0.3% year-over-year in 2011, according to MagnaGlobal, while newspapers dropped by a more dramatic 9.2%.
According to Kantar Media, magazine ad spending fell 4.9% year-over-year in Q4, with an overall 2011 decline of 0.4%. Consumer magazines spending dropped 5.2% in the fourth quarter due to deep cutbacks in auto, food and pharmaceutical advertising. Total year expenditures were level compared to prior year. Outlays in Sunday magazines fell 9.8% in Q4, the sixth consecutive quarter of year-over-year declines, and were down 7.2% for all of 2011.
Newspaper media revenue fell 3.7% in Q4 and for the year. Local newspaper ad expenditures dropped 3.9% during Q4, hurt by the reallocation of retailer advertising budgets to other media channels during the key holiday shopping season. Full year spending was 3.8% lower overall. The losses in newspaper spending are consistent with reductions in the amount of space sold.
MagnaGlobal expects newspaper advertising to decline by a more moderate 6% this year (-7.2% for national newspaper), and magazine advertising by 3.8%.
Strategy Analytics forecasts print revenues to decline by 1.5% in the US this year, although they will rise 0.5% on a global basis. According to the estimate, print will hold a 21.4% share of advertising revenue in the US, and a 26.4% share of global revenue.
According to a January 2012 eMarketer estimate, US online ad spending will exceed the total spent on print magazines and newspapers this year for the first time. Online ad spending was projected to be $39.5 billion, compared to $19.4 billion in newspaper ad spending, and $15.4 billion in magazine ad spending.
MagnaGlobal’s report indicates that radio advertising revenues fell 0.5% for the year in 2011.
Kantar Media’s figures also show that the pace of spending in radio media sagged, falling 5.6% in Q4 and 0.6% for the year. In Q4, local radio expenditures were down 3.8% and national spot radio plummeted 13.9%. The telecom, financial service and automotive categories were prime contributors to these quarterly decreases.
These figures stand in contrast to those from the Radio Advertising Bureau (RAB), which reported in February that radio revenues edged up in 2011, finishing the year at $17.4 billion, up about 0.6% from $17.3 billion in 2010.
MagnaGlobal’s forecast predicts radio ad revenues to drop by 0.8% this year in the US. A report released in April 2012 by BIA/Kelsey has a more positive forecast, expecting radio industry over-the-air (OTA) revenues to grow 3.5% to $14.5 billion this year.
Strategy Analytics forecasts ad revenue in traditional ad formats such as cinema and radio to grow 2.9% this year in the US, more muted than the predicted 4.1% global growth.
The MagnaGlobal report indicates that out-of-home (OOH) advertising revenues grew by a healthy 4% in 2011, a growth rate that it will match this year. This is supported by data from the Outdoor Advertising Association of America, which reported in February 2012 that US OOH spending rose 4% in 2011 to $6.39 billion.
Kantar Media data indicates that outdoor spending rose 1.1% in Q4, and by a stronger 6.5% for the full year.
According to Kantar Media, free standing inserts (FSIs) achieved healthy gains in the fourth quarter, with spend rising 3%. However, for the year, spending declined 4.3%.
Traditional Direct Marketing Spend to Decline
The MagnaGlobal forecast also expects that offline direct marketing will continue to decline in 2012, under the competition of online and mobile alternatives, with directories revenues decreasing by 23.2% after posting a 20.2% decline in 2011. Direct mail revenues will also fall by 2.4% after dropping 1.9% in 2011.