Ad Spending Down 0.6%; Auto Category Skids 10%

December 23, 2008

This article is included in these additional categories:

Automotive | Broadcast & Cable | CPG & FMCG | Financial Services | Out-of-Home | Pharma & Healthcare | Radio | Retail & E-Commerce | Television

Advertising spending declined by 0.6% through the first three quarters of 2008 compared with the same period last year, while TV showed the most growth during the period, according to preliminary figures released today by The Nielsen Company.

Cable TV set the pace for ad spending, climbing 8.4% over the same time period last year, Nielsen said. Overall, TV showed the biggest growth, representing four of the top five media categories. After a 6% dip through the first half of 2008, Network TV – with a boost from Olympic broadcasts – worked its way back up to a slight growth (0.9%) through the third quarter.

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On the other end, Local Sunday Supplements showed the biggest spending decline, dropping almost 10%. The four lowest-performing categories in terms of percent change were all print-based media.

Category Spending

Spending for the 10 largest advertising categories reached over $30 billion in the first three quarters of this year, 1% more than the same period last year. Most of the top-10 product categories showed increased spending, with the exception of Automotive (-8%), Pharmaceutical (-4%), and Auto Dealerships (-3%).

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The Direct Response Product category showed the largest period-over-period advertising growth (27%), driven largely by significant ad spending by Guthy-Renker, Rosetta Stone, and Allstar Marketing.

Quick Service Restaurants also showed a healthy increase in spending at 11%, accounting for an additional $328 million. Wendy’s/Arby’s Group and Jack-in-the-Box each increased spending approximately 30% in the first nine months of 2008.

Yum Brands, the top advertiser, increased its spending 10% to reach $698 million.

Automotive (Factory & Dealer Associations), the top category with $7.8 billion, showed the biggest decline in advertising. Spending by Ford Motor Company (-$320 million, -22%) and Cerberus Capital Management (-$247 million, -26%), were among the most significant drops, Nielsen said.

Advertiser Spending

Ad spending by the top 10 companies for the first three quarters of 2008 reached over $12.2 billion – down 4% from $12.7 billion during the same time period in 2007. Three of the top 10 advertisers increased their budgets while the majority showed decreases.

General Electric showed the greatest increase in terms of percent (19%), followed by Verizon (10%) and Johnson & Johnson (5%).

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The three automotive companies on the Top 10 list (GM, Toyota, Ford) collectively accounted for a decrease of $462 million in spending (-10%).

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