TNS: Media Spend Declined 2 Percent in Third Quarter

In spite of the billions in ad sales dollars that flowed into the market thanks to the XXIX Olympiad and a fiercely-contested (and protracted) presidential election season, media spend declined 2 percent in the third quarter of 2008, according to a new report issued by TNS Media Intelligence.

In the first nine months of the year, total measured media spend declined 3.7 percent, as steep drops in foreign and domestic automotive commitments erased gains tied to the two major quadrennial events.

Online remained one of the few bright spots, as display spending grew 7 percent versus the first three quarters of 2007. (TNS does not monitor paid search.)

Television also showed modest gains in the first three-quarters of 2008, as the medium saw overall spending increase by 2 percent. Syndication led the way with 9 percent growth versus the year-ago period, while national cable was up 3.7 percent and broadcast inched up 3 percent.

Spot TV declined 2.6 percent.

From there, the declines were precipitous. Magazines dropped 3.9 percent in the period, with consumer pubs falling 3.8 percent. B-to-B titles suffered a 6.9 percent reduction in ad dollars, while local mags were off by 6.5 percent.

Newspapers declined by 10 percent, radio fell 8.8 percent and, after six years of uninterrupted growth, outdoor slipped by 0.5 percent.

“Media ad spending, which began tiptoeing into negative territory in early 2007, has crossed an inflection point in the past six month as the economic downturn has become more widespread,” said Jon Swallen, senior vp, research at TNS Media Intelligence. “Preliminary data from the fourth quarter indicate a further slackening of the overall advertising market. Consumer spending levels…remain a serious concern and will have a strong influence on the depth and duration of the current difficulties facing advertising.”

According to TNS, the top 10 advertisers spent a combined total of $12.8 billion, a 0.2 percent decrease from last year. Six of the top 10 categories reduced their media budgets in the nine-month period, including top-spending P&G, which pared back 5.9 percent to $2.29 billion. Fourth-ranked AT$T showed the biggest pullback, reducing measured spend by 13.7 percent, to $1.45 billion.

Those marketers that increased their spend did so magnanimously. Beleaguered automaker General Motors upped its ad spending by 15.7 percent in the period, to a third-place $1.59 billion. Number-two Verizon grew its ad budget by 12.8 percent to $1.71 billion, as did General Electric, which spent $894 million.

News Corp. also boosted its media spend by a double-digit figure, growing it 10.4 percent to $1.06 billion.

The top 10 categories spent a total of $54.2 billion, down 1 percent from a year ago. Automotive was the top-spending category at $9.63 billion, representing a drop of 12.7 percent, which is proportionately in line with the decline in new vehicle sales. Spending cutbacks were more severe for the domestic segment, which plummeted 18.9 percent to $4.11 billion. Foreign auto was off 7.4 percent in the period ($5.52 billion).
Financial services advertising rebounded modestly in the third quarter after a lackluster first half, and the category closed out the three-quarter period at $6.77 billion, up 0.8 percent. Restaurants demonstrated the greatest increase, spending $4.28 billion, up 6.1 percent year-over-year.