U.S. ad spending drops the most since 2001
By Erina Lin, Wednesday 24 September 2008 at 23:23 :: Advertising :: #2343 :: rss
U.S. advertising spending has plummeted the most since 2001, as companies cut marketing budgets in the weakening economics that tighten consumer spending, according to Bloomberg.
Ad spending dropped 3.7 percent in the second quarter year-over-year, the biggest drop since 2001, according to a statement from TNS Media Intelligence Wednesday.
The spending in the first quarter was up 0.6 percent year-over-year.
Consumer spending in the third quarter may be the weakest since 1991, a survey targeting economists pointed out this month. “Advertisers are shifting marketing dollars to the Internet, cable television and syndicated TV to target more specific audiences,” said Jon Swallen, senior vice president of research at TNS, Bloomberg reported.
“The sudden brakes that consumers put on spending immediately manifested itself in advertisers also putting the brakes on their spending,” Swallen said in an interview. Even though there was a boost from the Olympics and political campaigns, “it's hard to see a sharp consumer turnaround in the second half that would fuel ad sales,” he added.
“Total ad spending this year will fall below 2 percent of the U.S. gross domestic product next year for the first time since 1981,” said BMO Capital Markets analyst Leland Westerfield.
Internet spending rose 7.6 percent on online display ads and 2.3 percent on cable in the second quarter year-over-year; however, slower than 8.5 percent and 4.1 percent in the first quarter. Syndicated TV increased 9.1 percent, compared to 11.2 percent the previous quarter.
The sections reporting deeper declines in the second quarter included newspapers and radio. National plunged 12.7 percent, local was down 9.2 percent, while radio slumped 8 percent, according to Bloomberg.
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