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Ad Spending Up Across Broad Range Of Categories, Broad Range Of Media
08 Jul 2010 Posted by Market and Main Media
First-quarter ad spending was up by 5% when compared to the first quarter of 2009, making it the first positive spending quarter in the last 2 years. In an interview with Media Life, Jon Swallen (senior vice president of Kantar Media) explains that TV, radio and the Internet led the recovery while overall print media, though improved, is still lagging somewhat behind.
Improvements in spending were present across a broad range of categories with automotive at the forefront, with all of the major manufacturers (GM, Ford, Honda, Toyota, Nissan and Hyundai) spending actively again with the exception of Volkswagen. Financial services also performed well, driven by credit card companies American Express and JPMorgan Chase spending strongly.
In terms of newspapers, the national papers (The Wall Street Journal, The New York Times and USA Today) gained 9% in advertising while local papers were down 5.6%. Newspaper advertising was boosted by spending among automotive, especially by local auto dealers and dealer associations, and other retail categories like home improvement stores and department stores.
For now, second-quarter spending is expected to continue at this positive pace but the rest of the year remains in doubt. Factors that may impact the recovery include consumer sentiment, job growth and even the European financial situation.
“We’re definitely in a better place now than six months ago. Everyone wants to know, will we still be in a good place or an even better place in another six months? I think these results are encouraging and it certainly positions the market well for the rest of the year. But I think in the back half of the year there are still some potential doubts about what could go wrong,” concluded Swallen.
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Spending Expectations Are Up With Consumers And Marketers
11 May 2010 Posted by Market and Main Media
Consumers’ hibernation may be over, according to an article in Ad Age. While the recession kept consumers eating at home, limiting spending and buying private-label goods, there are some signs that these behaviors are beginning to change. For instance, March showed the largest one-month gain in consumer spending in over a decade and auto sales are up by 24% from a year ago, a huge positive gain. In addition, private label sales have been leveling off in the last few months. Furthermore, Consumer Edge Research’s tracking study found that people eating out more than they had been even a few months ago, are less likely to wait for a deal (in the form of coupons or price promotions) and are more likely to buy toiletries and cosmetics.
This is good news for marketers’ spending as well. Though Zenith Optimedia’s global ad-spending forecast still calls for a spending decline for 2010 in North America, the organization has changed that forecast twice recently in favor of more spending. CPG marketers seem to be ready to start spending again as well after sharp spending cuts last year, says a Sanford C. Bernstein report.
Consumers’ hibernation may be over, according to an article in Ad Age. While the recession kept consumers eating at home, limiting spending and buying private-label goods, there are some signs that these behaviors are beginning to change. For instance, March showed the largest one-month gain in consumer spending in over a decade and auto sales are up by 24% from a year ago, a huge positive gain. In addition, private label sales have been leveling off in the last few months. Furthermore, Consumer Edge Research’s tracking study found that people eating out more than they had been even a few months ago, are less likely to wait for a deal (in the form of coupons or price promotions) and are more likely to buy toiletries and cosmetics.
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Nielsen Wire: 32 Direct Response Ads Are Watched Per Week
11 May 2010 Posted by Market and Main Media
Nielsen Wire recently reported on the rise of direct response ads, which, since 2007, have seen a “remarkable 18% growth in total units” in the U.S. Currently, direct response makes up 14% of all TV advertising but is expected to gain more of the ad spend share. Nielsen attributes the potential for this growth to trendy products (e.g., the Snuggie, super absorbent towels and “language learning CDs”) that are capturing a lot of consumer attention.
Though both Spot Radio and Cable TV have seen some growth in ad units from 2007 to 2009 (with a dip in 2008 for Spot Radio), Spot TV is the only one of the three that can claim more than 2,000,000 ad units.
Nielsen further researched the trend by tracking the number of direct response national TV ads that ran in the U.S. in one week. For the week reviewed, more than 15,500 DR units aired and 88% of all U.S. TV homes watched at least one. An average of 32 ads were viewed per household.
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Signs Of Ad Spending Reversal Appearing
14 Apr 2010 Posted by Market and Main Media
Continuing the downward trend of the last six quarters, spending on advertising in the U.S. fell by 9% in 2009, bringing the total down to $117 billion for the year. However, there are small indications that things may be turning around. For example, the rate of decline is slowing down. “Fourth quarter ad spending was down just two percent year-over-year, and that helped soften the full-year decline,” said Terrie Brennan, senior VP for new business development at The Nielsen Company. Brennan added, “Most of the top advertisers showed increased spending late in the year. These are encouraging signs for an ad market that’s still trying to stop the bleeding.”
Based on the Nielsen Company’s data, the strongest performing media categories were Spanish language cable TV (with a 32.2% increase in ad spending from 2008 to 2009), cable TV (with a 14.8% increase) and the FSI coupon (which increased by 11.5%). The Internet was flat with a .1% increase. On the other end of the spectrum, the poorest performing media categories were the local Sunday supplement (which declined by almost half [44.9%] from 2008 to 2009), B2B (spending lost 32.7%) and local magazines (which lost 23.9% in the same time period).
Even print media is seeing some encouraging signs. Ad spending in national newspapers had plummeted by 21.6% during 2009’s first three quarters, but the fourth quarter showed only a 13.7% decrease from 2008. Local newspapers, not quite so hard hit as the national papers, lost only 10.4% in ad revenue for fourth quarter (down from 14% in the first three quarters).
Though the automotive product category (factory and dealer) spent the most at $8,039.1 million, this represented a significant decline (23.4%) from 2008. The only other product category with such a large decline was local auto dealerships (-23%). Pharmaceuticals remained big spenders with a 1.8% increase over 2008 to $4,504.6 million. The only other two product categories of the Top 10 that showed increases from 2008 to 2009 in ad spending were QSRs (+1.3%) and department stores (+2.8%).
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