Total measured advertising expenditures in the first six months of 2008 declined 1.6% compared with the first half of 2007, while second-quarter ad spend was down 3.7% vs. 2Q07 – the steepest quarterly drop since 2001 – according to TNS Media Intelligence.
“Advertising expenditures started to contract in March, well before the September turbulence on Wall Street renewed concerns about the health of the economy and possible collateral damage to the ad market,” said Jon Swallen, SVP of research at TNS Media Intelligence.
“Second half results, particularly for television media, will be bolstered by the summer Olympics and political elections. However, sustained improvement will most likely depend on a turnaround in consumer spending that rejuvenates corporate profits and encourages marketers to expand their advertising efforts.”
“While expenditures are certainly indicative of the challenges being presented by the economy, they also suggest the continuation of the long-term trend of marketing dollars migrating to media such as the internet, cable TV and syndication that provide the ability to more effectively target specific audiences,” said Dean DeBiase, CEO of TNS Media.
Below, the findings issued by TNS.
Ad Spending, by Medium
Each of the 19 measured media types posted weaker year-over-year performance in the second quarter compared with the first three months of 2008.
For the half year, internet display advertising expenditures increased 8.0% as marketers continued to expand their online programs. Cable TV (+3.1%) and Syndication TV (+10.2%) were aided by limited exposure to the TV writer’s strike. Outdoor ad spending advanced by 1.8%.
Spot TV expenditures fell 4.4% as reductions in automotive, retail and telecommunications advertising more than offset gains from political spending. Network TV slipped 2.4% on weaker prime time results.
Newspaper media (-7.4%) and Radio media (-6.5%) continued to lag on further slowdowns in spending from the auto, financial, retail and telecom categories.
Ad Spending, by Advertiser
The top 10 advertisers in the first six months of 2008 spent a combined total of $8,442.7 million, a 3.0% decrease from last year.
Across the top 50 companies, a more diversified group of marketers representing nearly one-third of total ad expenditures, spending fell by 4.7%.
Procter & Gamble maintained its position as the largest advertiser with $1,490.2 million in expenditures for the January-June period, a 7.6% decrease versus a year ago. The company sharply reduced outlays in April-June, its fiscal fourth quarter.
Other packaged goods marketers in the top 10 had mixed results. Johnson & Johnson (-11.8%, to $690.5 million) and Kraft Foods (-6.7%, to $528.5 million) lowered their ad budgets while Pepsico (+5.0%, to $586.5 million) had a modest increase.
Among the auto manufacturers, Ford Motor Company fell out of the top 10, leaving General Motors as the lone industry representative. GM’s ad spending was $1,037.1 million, an increase of 12.9%. Model redesigns for the Chevrolet Malibu and Cadillac CTS were responsible for much of the lift.
The leading telecommunication companies have recently taken opposite paths. Verizon Communications spent $1,102.3 million in the first half of 2008, a gain of 7.6%. AT&T spent $940.1 million, a reduction of 15.6%. Over the most recent 12 months, Verizon has raised ad spending by $200 million while AT&T has lowered its budgets by $100 million.
Ad Spending, by Category
The top 10 advertising categories in the first quarter of 2008 spent a total of $36,336.3 million, down 0.7% from a year ago.
Automotive was the top-spending category at $6,478.4 million, a decline of 11.2% as the industry continued to grapple with a sales slowdown. Spending reductions were most pronounced for light truck models. Automotive expenditures have now declined for twelve consecutive quarters.
Financial services advertising remained stalled and finished the half year flat at $4,498.7 million. Credit card marketers pulled back on spending toward the end of the period, while retail bank advertising picked up momentum, an outcome of the need to attract consumer deposits in the face of widening liquidity concerns.
The largest percentage gain was achieved by Food & Candy, up 7.4% to $3,171.1 million. Local Services & Amusements (+3.5% to $4,514.5 million) and Restaurants (+5.0% to $2,835.6 million) also turned in positive performances.
Telecommunications spending tumbled 8.9% to $4,070.1 million. Continuing a recent trend, higher expenditures from leading cable and satellite TV providers were more than offset by reductions from the wireless segment.
Miscellaneous Retail, which includes all retail segments except department stores and home furnishings/appliance stores, was down 4.2% to $3,990.0 million during a period when consumer spending was also easing.
TNS Media Intelligence monitors Branded Entertainment within network prime time and late night programming. The tracking identifies Brand Appearances and measures their duration and attributes. Given the short length of many Brand Appearances, duration is a more relevant metric than a count of occurrences for quantifying and comparing the gross amount of brand activity that viewers are potentially exposed to in the program versus in the commercial breaks.
In the second quarter of 2008, an average hour of monitored prime time network programming contained 8 minutes, 15 seconds (8:15) of in-show Brand Appearances, a 2% increase from a year earlier. In addition, there was 14:17 per hour of network commercial messages. The combined total of 22:32 of marketing content represents 38% of a prime-time hour.
Unscripted reality programming had an average of 10:19 per hour of Brand Appearances compared with just 6:04 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows averaged 14:00 per hour. The combined load of Brand Appearances and network ad messages in these shows reached 29:25 per hour, or 49% of total programming time.
Among all monitored network programming during the period, The Biggest Loser Couples had the highest average volume of Brand Appearance time at 44 minutes, 20 seconds (44:20) per hour. Rounding out the top 5 were The Price is Right: Million Dollar Spectacular (35.18); Dance Machine (28:31); Oprah’s Big Give (26:28); and Big Bang Theory (23:07).