Areas of Ad Spend Drop 14% in First Quarter



downward-graphAs we rapidly approach the end of the second quarter of 2009 there is still news trickling in from what happened in Q1. As suspected, that news is not good. A study by TNS Media Intelligence was reported in today’s WSJ and ad spend for media including TV, print and online display ads fell 14% year to year to $30.8 billion. It is important to note that this number does NOT include online search ads or in store ads.

Based on that what are these numbers telling us? First, they are from the equivalent of a century ago but they are simply validation that things have been bad and all of the complaining may have some merit. In fact, to hear TNS’s senior vice president of research, Jon Swallen, put it “We are now in the record books with the worst quarter in a decade.”

So are we looking at a turnaround anytime soon? Swallen continues

A recovery in the media business may take time. “So far it looks like second-quarter spending is starting pretty much the same way the first quarter ended. There are hopeful signs of general economic indicators bottoming out, but the advertising sector still appears to be lagging behind”.

Had enough doom and gloom for the day? Take heart Internet marketers. TNS , unlike other reports, is saying that online display advertising, which includes banners, was actually UP 8.2%. You can rub your eyes and scream “Typo!” if you want but please don’t shoot the messenger in the comment section. PricewaterhouseCoopers just reported last week a 5.5% drop in online display advertising. So who’s right? Are either right? Shall we just meet close to the middle and call it a draw for online display ads as compared to Q1 for 2008?

As for Q2? Most are saying that it looks like it could be just as bad, if not worse, but there may be sentiment shifting toward some recovery in the second half of the year.

Before we all bemoan the state of the advertising world across the board it is important to take in one last piece of data

TNS said the ad market was hampered by double-digit pullbacks in spending by big industries like autos and financial services.

Ad spending in the automotive category slid 28%, with local car-dealer ad spending taking the biggest hit, falling almost 50%. Spending by financial services companies fell 18%.

Now one wonders what actually happened in other sectors that weren’t in the news for receiving bundles of bailout cash and a lot of negative publicity for their relative incompetence. As with all studies and data it is interesting to track an overall trend but if there is no attention given to the details about specific industries that affect your line of business directly you could be missing the point or, even worse, some opportunity.

Marketing Pilgrim readers work in all areas of business. What are you seeing in your industry? Are you in the doldrums like the auto and finance industries or are you seeing a light at the end of this tunnel (and you are reasonably sure it’s not a train)? Maybe a street level sampling can add something to the big picture. At least you may find out you’re not alone.