Ad Spending Trends Reveal No Surprises

NEW YORK The nation’s top 10 advertisers held back nearly $670 million from the media marketplace for the first three quarters of the year, representing a 5 percent decline compared to the same period a year ago, according to just-released data from Nielsen Monitor-Plus. That said, the numbers support the notion that marketers have shifted some of those dollars into digital platforms instead.

In fact, the top 10 spent nearly $700 million less on TV time alone and $180 million more on digital media during the first three quarters. The digital uptick represents a 24 percent increase over last year—the fourth highest percentage increase among media categories, after freestanding insert coupons (37 percent), Sunday supplements (33 percent) and Spanish cable TV (31 percent), the Nielsen data showed.

Although total digital spending of $742 million for the first nine months is a drop in the bucket compared to the $9.06 billion that TV took in, many believe that the shifts in spending will continue unabated. Digital is the “new normal for marketers because it’s the normal behavior for consumers,” said Greg Andersen, director of engagement planning at Bartle Bogle Hegarty here.

The largest percentage decrease among the top 10 came from General Motors, whose spending dipped 21 percent to $1.4 billion in the first nine months compared to last year, when spending swelled to support a Winter Olympics sponsorship and two model launches. The next largest drops were Johnson & Johnson and Chrysler (both down 11 percent, to $1.01 billion and $885 million, respectively), followed by Time Warner (down 8 percent, to $1.02 billion) and Toyota (down 7 percent, to $944 million), according to Nielsen.

All but two of the largest advertisers, which include Procter & Gamble, AT&T and Verizon, spent less on TV, and some, like GM, dropped off by more than 20 percent, according to the data. Kraft Foods’ TV spending declined about 11 percent, to an estimated $520 million. The exceptions were Ford and Toyota, whose TV spends rose 3 percent and 4 percent, respectively.

“Advertisers are getting tired of paying more and more for less,” said Barry Lowenthal, president of MDC Partners’ The Media Kitchen here, referring to declining TV viewership.

Seven of the top spenders increased their online investment. “The importance of online will continue to grow,” said a Ford rep. Some 70 percent of consumers who shop for a new car or truck do Web research, a GM rep added.

For P&G, whose total online spend grew 44 percent to nearly $20 million in the first three quarters, according to Nielsen Online, the boost in digital spending makes sense because consumers are devoting more time on the Web and the digital platform lends itself to building relationships, a company rep said.

That said, three marketers—J&J, Time Warner and Toyota— spent less online, at least through September. Those results may change slightly by year’s end, however. Toyota’s online spend, for example, was down just 5 percent in the first nine months, to an estimated $35 million, according to Nielsen, which, like Adweek, is a unit of the Nielsen Co.

The biggest category losers were national newspapers, where the group collectively spent 44 percent less, spot radio (down 43 percent), all radio (down 25 percent) and local magazines (down 22 percent). Network and spot TV each declined 10 percent and all TV dropped 7 percent, according to Nielsen.

Although many marketers are taking money out of print publications, there were significant exceptions. Chrysler’s print spending, for example, grew by 48 percent in the first nine months, to nearly $140 million. Other print increases came from Kraft Foods (up 30 percent, to $340 million), Time Warner (up 16 percent, to $210 million) and P&G (up 6 percent). During the same period, all four marketers cut TV spending.

“We do like print,” said a Chrysler rep. “It’s a way to get a lot of content out about a new product.” Print also was integral to a corporate image campaign that Chrysler launched in August, the rep said.

P&G, the biggest overall spender, banked an estimated $560 million on print media in the first three quarters, up from about $526 million in the same period last year, according to Nielsen. “Print continues to be an important medium for us,” particularly for beauty products such as Olay, the P&G rep said. “If our consumers are reading newspapers and magazines, that’s where we want to be.”

The overall decline in national newspaper spending is not surprising, given circulation declines and the general trend among consumers to seek information online. Leading the pack in declining newspaper spending were automakers GM (down 68 percent) and Ford (down 43 percent) and telecommunications companies AT&T (down 45 percent) and Verizon (down 31 percent).