AD BIZ’S OPTIMISM VANISHES
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The ad market continued its downward spiral in the first quarter as Detroit’s woes and the sagging economy took their toll, a new report shows.
Although advertising and media executives have said they see signs that the ad market is bottoming out, none of that optimism is reflected in the latest numbers from Nielsen.
US ad expenditures fell $3.8 billion, or 12 percent, to $27.9 billion in the first three months of 2009, with spending down across all major media categories, according to Nielsen’s Monitor-Plus ad-tracking service.
The ad pullback, coupled with the shift of dollars online, weighed heavily on print publications.
The situation remained grim for national newspapers, where spending was down almost 28 percent. National magazines slumped about 21 percent, while business-to-business and trade publications witnessed a nearly 30 percent decline.
Local television, which relies on automotive advertising, fared worse than national networks and cable channels, which were down a modest 4.8 percent and 2.7 percent, respectively. In comparison, spot TV spending fell 15.6 percent in the biggest markets, and 29 percent in other markets.
Nielsen said Internet advertising fell 3.4 percent, although that figure doesn’t include paid search ads. On Friday, the Interactive Advertising Bureau reported that ad spending on the Web fell 5 percent in the first quarter, the first decline in the normally robust online ad sector since 2002.
With Chrysler and GM in bankruptcy, auto advertisers slashed spending by almost $723 million, or nearly 28 percent, Nielsen said. Local dealers also made sizable cutbacks, declining 24 percent. Nielsen estimates 3,000 dealers stopped advertising altogether.
It’s not all doom and gloom, though. Sensing an opportunity to gain market share, some ad categories are stepping up spending. Fast-food chains, including McDonald’s, Wendy’s and Burger King, upped their spending a combined 7.7 percent, to appeal to cost-conscious consumers.