Despite indications that the country has begun heaving itself out of the Great Recession, media proved to be a lagging indicator, as third quarter advertising spend declined 15.3 percent versus the year-ago period.
According to a new report issued by TNS Media Intelligence, Q3 2009 ad dollars added up to $29.6 billion, marking the sixth straight quarter of year-over-year decline. In the year-ago period, ad expenditures tallied up to $34.9 billion.
Looking back at the first nine months of this year, total measured ad expenditures dropped by 14.7 percent, to $90.3 billion, as steep drops in auto, financial services and retail commitments threw a shadow over the entire media spectrum.
Online remained one of the few bright spots, as display spending grew 7 percent versus the first three quarters of 2008. (TNS does not monitor paid search.) Free-standing inserts also saw some life, growing 3.9 percent.
Among the major media outlets, television gutted out the first nine months, as the tube saw overall decline of 12.1 percent. Syndication led the way with a 2.8 percent dip, while national cable fell just 2.9 percent versus the year-ago period. Broadcast fell 11.5 percent, based in part on unfavorable year-over-year comparisons with the Summer Olympics boom and an influx of 2008 election dollars.
After declining 2.6 percent in the same period a year ago, the bottom fell out for spot TV. Local business plummeted 27.5 percent as weakness in auto and retail activity persisted.
From there, the declines were vertiginous. Radio and newspaper both dropped 22.8 percent, while magazines fell 19.7 percent in the period. B-to-B titles suffered a 27.6 percent reduction in ad dollars, while consumer pubs were off 18.7 percent.
Even outdoor took its lumps. Last year, the category saw a slight (0.5 percent) downtick after having registered six years of uninterrupted growth. This year, outdoor fell 16.2 percent in the first three quarters.
“The updated monthly trend line on total advertising expenditures still shows no meaningful improvement through October,” said Jon Swallen, senior vp, research at TNS Media Intelligence. “The slump has now passed its first anniversary and year-on-year comparisons will become easier in the upcoming months. Going forward, the timing, strength and durability of an advertising recovery will ultimately be determined by the way consumer activity rebounds.”
Last month, consumer confidence began to rise ever so slightly. According to the New York-based private research group The Conference Board, the consumer confidence index in November increased to 49.5 from 48.7 the prior month. By way of comparison, the CCI average for 2008 was 58, nearly half the 103.4 reported by the Board in 2007.
According to TNS, the top 10 advertisers spent a combined total of $11.8 billion from January to September, down 5.9 percent from $12.5 billion a year ago. Two of the top 10 spenders actually increased their media activity in the period: seventh-ranked Sprint Nextel upped its overall ad spend 51.1 percent to $912.8 million, while eighth-ranked Pfizer invested $896.6 million in measured media, an increase of 11.9 percent.
Four of the top 10 spenders reduced their media budgets by 10 percent or greater, including top-spending P&G, which pared back 15.9 percent to $1.94 billion. Third-ranked General Motors reduced its measured ad spend by 15.5 percent, to $1.35 billion, nearly reversing the 15.7 percent increase it posted in the year-ago period.
Ninth-ranked Time Warner cut its ad spend by 10.7 percent to $874.5 million, while No. 10 General Electric dialed back 12.9 percent to $763.6 million.
The top 10 categories spent a total of $50.95 billion, down 14.1 percent from a year ago. Despite a 30.8 percent rollback, automotive remained the top-spending category at $7.49 billion, a reduction that was proportionately in line with the decline in new vehicle sales. Auto spend has now declined in each of the last 17 quarters.
Domestic auto dropped 30 percent to $3.71 billion, in line with the 31.6 percent decline among foreign auto companies ($3.78 billion).
Financial services advertising also continued to suffer, as the category closed out the nine-month period down 23.7 percent to $5.67 billion. Miscellaneous retail, which excludes department stores and big-box outlets, fell 17.4 percent year-over-year, to $4.75 billion.
There were, however, two faint glimmers of light. Second-ranked telecom spent 0.4 percent more on media in the first three quarters of 2009, as ongoing skirmishes (AT&T vs. Verizon; Verizon vs. Time Warner Cable) helped boost category spend to $6.19 billion. Meanwhile, No. 10 pharma upped its spend by 0.6 percent to $3.48 billion.