US online ad spend grows by 8.2%
Friday, June 12, 2009 13:13According to data released by TNS Media Intelligence today US internet advertising expenditure increased by 8.2%. Telecoms, travel and retail advertisers have expanded their online advertising campaigns.
Despite the overall market trend, telecom advertising expenditures have risen by 3.0 % with increases happening across major wireless, cable and satellite TV providers. Restaurant advertising budgets were also increased by 2.5% which was driven by quick-service food establishments in the USA.
The total measured advertising expenditure in Q1 of 2009 has actually plunged by 14.2% compared a year ago, now $30.18 billion. This fall in US advertising spend followed a 9.2% decline in Q4 2008 as the recession in US advertising has progressed into the new year.
The rate of decline was felt across Newspaper, Radio, Print and TV where each of these segments were severely affected, although there has been a slight improvement in local media advertising due to increased spend in the restaurant category.
It seems that the worst affected advertisers are the smaller players. The top ten US advertisers spent 5.7% less in Q1 2009 compared to last year, whilst the long tail of smaller advertisers, which represent about one fifth of the total advertising spend, were spending 22.3% less.
Procter & Gamble (PG), remained the largest US advertiser with a total ad spend of $674.1 million, this was despite cutting ad expenditure by 17.8%. The company had reduced TV allocations by nearly 30% across its brand portfolio, although magazine budgets were held at previous levels.
By contrast Johnson & Johnson (JNJ), a top 10 packaged goods marketer actually increased its’ total ad expenditure by 28.9%, $397.2 million, this was its’ highest level of quarterly advertising spending since 2007.
US telecommunication provider, Sprint Nextel (S) also aggressively increased its’ spending by 30.3%, to $317.7 million whilst Verizon Communications (VZ) raised expenditure by 3.1% to $577.1 million. Rival AT&T (T) noted a small reduction of 1.2% to $459.4 million.
General Motors (GMGMQ.PK) reduced its advertising expenditures by 19.1% to $424.2 million. Overall auto manufacturer spending was down 15.2% whilst dealer advertising was down a 48.9% after a 38% decline in new-vehicle sales during the same time period.
The financial services sector has cut over $400 million of spending down 18.1%. Reductions were most prominent with loan products (-67.9%), credit cards (-41.0%) and retail banking (-20.7%). More noteworthy declines occurred with Local Services (-14.7%), Direct Response (-17.4 %) and Travel & Tourism (-14.3%).
Jon Swallen, SVP of Research at TNS indicated that data for Q2 2009 shows overall ad expendature comparable to recent months.
