Ad Spend Sinks 14% in 1H09; P&G Cedes Top Spot to Verizon

September 18, 2009

Ad spending fell 14.3% in the first half of the year, to $60.87 billion, according to TNS Media Intelligence. The TNS number is similar to that reported two weeks ago by The Nielsen Company, which said that total ad spending was down 15.4% for H109, to $56.9 billion.?

Second-quarter spending was similar to Q1 spending, which could indicate that the steep decline may have have leveled off. These 14% declines represent billions of dollars in lost revenue, said John Swallen, SVP of research for TNS, who cautions that too much optimism could be premature. Early data from Q3 hint at possible improvements for some media because of? easy comparisons against distressed levels of year ago expenditures, reports MediaBuyerPlanner.

Spending by Medium

Two segments – internet display advertising and free-standing inserts – rose in H109, by 6.5% and 4.6% respectively. Packaged goods spending helped push those numbers up. Nielsen, however, had display ads slipping 1%.

TNS said print media saw significant declines, with magazine spending falling 21% and newspaper spending down 24.2%.

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Updates on other media:

  • Radio spending was down the most, dropping 24.6%; local radio was down 25.5%, while national spot was down 29%. Network radio fell just 8.7%. Outdoor fell 15.7%.
  • Spot TV was down 27%, while network TV (down 5.5%), cable (down 3.6%) and national syndication (down 0.7%) fared better. Total TV spending was off 10%.

Ad Spending by Advertiser

The top 10 advertisers spend 3.5% less in H1, with Procter & Gamble, formerly the largest advertiser, cutting spending by 20%. Verizon increased spending 3.1%, to nearly $1.2 million, landing the spot as the #1 spender. The largest budget cut came from General Motors, which slased spending by nearly 26%, to $773 million.

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Warner, Walt Disney and News Corp. also hacked ad spending in the first half. Time Warner cut outlays by 11.1% to $574.3 million, Disney spent 11.7% less, to $517.6 million, and News Corp. cut ad spending by 6.9% to $672.3 million.

TNS said that General Electric Co., which owns NBCU, was the only media firm to increase ad spending in the first half of the year. Its budget jumped 5.1% to $548.3 million.

Ad Spending by Category

The ten largest advertising categories in H109 spent a total of $33,588.8 million, a drop of 14.5% from a year ago. Automotive barely held on to the top spot after expenditures plunged 31.1% to $4,449.5 million in response to depressed sales of new vehicles. Dealer spending was off more sharply than manufacturer spending. Through June, auto advertising is pacing at a level one-half its 2005 peak.

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Heightened competition among wireless phone companies and TV service providers boosted Telecommunications category spending to $4,276.4 million, an increase of 7.5%. The only other top category to achieve a gain in the period was Restaurants, up 0.6% to $2,886.4 million.

Financial Services advertising sank 24.3% to $3,752.1 million. As consumer lending seized up, credit card companies and loan providers severely curtailed their marketing programs.

Consumer-packaged goods, traditionally looked to as a pillar of strength in advertising recessions, performed better than the overall ad market but still wound up in negative territory. The Food & Candy category slipped 4.7% to $3,031.9 million and Personal Care Products declined 9.7% to $2,662.5 million. Further down the rankings, other CPG segments also fell. Non-Prescription Remedies was 5.7% lower, at $1,799.4 million. Household Products was down 2.7% to $1,027.9 million.

Elsewhere, the impact of the housing market slowdown was reflected in sharply lower ad spending from housing-related categories, TNS said.

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