Global Ad Spend Decline Slows in Q209

October 1, 2009

The decline in global ad spending appears to have bottomed out in Q209, with the rate of decline in spending slowing from the previous three months, according to Nielsen Global AdView, MediaBuyerPlanner writes. Nielsen reported that global ad spending slid only 5.8% in Q209, following a 7.9% decline in Q1. According to the? AdView Pulse – which reports advertising across 27 markets in Asia, North America, Europe and Africa – overall advertising expenditures decreased 6.8% for the first half of the year compared with the first half of 2008.

These results coincide with comments from ad-industry executives who have said that the worst is likely over, though the chief executives of Havas and WPP have both cautioned there are no clear signs of an advertising market recovery just? yet.

Performance by Region

The Asia Pacific region is driving some of the recent Q2 improvements, with 6.5% ad-spend growth in Q2. This is happening even as Europe and North America still face? some challenges posed by the economic crisis.

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Peformance by Media Type

Nielsen reported that all media types have suffered from general cutbacks by advertisers throughout the first half of the year:

  • Magazines and newspapers took the biggest hit losing -18.5% and -7.5%, respectively, with negative growth in all regions.

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  • Radio has emerged in many markets as the media type with the most contained percentage decline (-3.1% globally), even registering an increase in Asia Pacific (+3.1%).
  • Television showed mixed results by region, with North America (-14.9%) and Europe (-8.0%) showing drops in spend, while Asia Pacific showed growth when compared with the first half of 2008.

As with the half-year results, TV and radio are the media types showing the smallest percentage decreases in Q2 and they are still showing growth in Asia Pacific and losing revenues in both Europe and North America.

“In this economic environment, brands favor broadcast media: TV always being considered as the most reliable media in hard times and radio provides a solid call to action platform,” said Ben Van der Werf, managing director, Global AdView. “Throughout the remainder of 2009 and beyond, we can expect to see ad spend for broadcast media slowly moving toward better performance – but it’s unlikely print advertising will show any great gains in the near future.”

Van der Werf added that though newspapers show a more contained decline versus the quarter two 2008, driven by a less steep decline in APAC, magazines, which closed Q2 with a larger-than-Q1 19.6% decline,? seem not to have benefited by the slight improvements of the market.

Performance by Sector

The majority of sectors are continuing to reduce their advertising budgets compared with last year but some good performances in the second quarter have led to three large sectors – distribution channels, FMCG and healthcare – increasing their ad spend vs.the first half of 2008.

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These three sectors were the only industries to have advertised more in the first half of 2009 than they did in the same period last year,? Van der Werf noted. This, he said, is because of an ad-spend increase in primary products such as food, for cheaper alternatives to out of home entertainment, such as quick-service restaurants, and for ‘do it yourself’ products.

Automotive (-21% in H109) and finance (-17.2%) continue to show the largest percentage decreases in ad spend.? Telecommunications reduced its ad spend by 0.6 percent compared to quarter two 2008, which is a much more contained reduction than that of Q1.

Online Not Included

The specific Nielsen data in the study referenced above does not include spending on the internet, which has held up better than most traditional media. In Britain, online spending overtook television in the first half of the year, according to a report published this week by the Internet Advertising Bureau of Britain. Online ad expenditure in Britain climbed 4.6% in the H109. The internet now accounts for 23.5% of the ad market, while TV holds 21.9% and print maintains the lead, at 30%. Print, however, has suffered the biggest declines.

A separate report from Nielsen Online showed that the online display advertising market grew by 11% compared with H108, and increased by 44% when compared with 2006 figures.

A separate Nielsen analysis found that ad spend on the top social networking sites has grown 119% in the past year.

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