Happier Advertising Days Are Here Again For Most But Still Not Print

Philip Stone May 27, 2010 Follow on Twitter

US Q1 advertising revenue rose by $1.5 billion from a year ago marking the first quarterly increase for two years and the largest gain for four years fueled by the automobile sector finally seeing advertising sense again, according to a Kantar Media survey, with TV, radio, and the Internet the main beneficiaries, but newspapers and magazine are still in decline.

Kantar was downright enthusiastic, seeing 13 of the 19 media sectors it tracks gaining ad revenue. “With the economy turning from recession towards growth, marketers appear to be more confident about a pickup in consumer activity and have increased ad budgets to support their brands,” said Research Senior Vice President Jon Swallen. “While the rising tide has thus far benefitted some media sectors more than others, Q1 spending hikes were broadly distributed across advertisers and categories and that’s an encouraging signal for the market going forward.”

And with General Motors increasing its ad spend in the quarter by $118.2 million (28.5% higher than a year ago) and Procter & Gamble keeping the top spot with a $116.1 million increase (17.7%) to $772.6 million the numbers certainly have the look and feel of “Happy Days Are Here Again.”

But print media, on the whole, is not celebrating. Local newspaper ad revenue was down 5.6% and while national newspapers were up 9.1% that was primarily because of the Wall Street Journal that combines web and print figures. Magazines continued to show declines although, strangely, those magazines inserted into Sunday newspapers did real good, up 13.7%.  Internet display ad revenue increased 5%.

Television led the charge, up overall by 10.5% although spot TV income rose dramatically by 22%. The networks saw an 11.6% increase.

Most newspaper groups have been reporting seeing better advertising trends but this survey at best can only say the huge declines have stopped, but the numbers are still declining all the same, at least when compared to a year earlier.

Magazines, however, are benefitting from that increased P&G spend, according to Kantar. It appears the world’s largest advertiser is seeing better value for money from magazines at the moment than it does from television.

The biggest percentage ad increase from a single company came from Pfizer, up 46.2%. It was heavily promoting its anti-cholesterol Lipitor drug that loses its patent protection next year.

The auto industry as a whole spent $3 billion in the quarter (about two-thirds by the manufacturers and one-third by dealers), ending a streak of 18 consecutive quarterly declines, with most of that spend going to TV, magazines and radio. That $3 billion was around 10% of the country’s total ad spend which is one reason they used to say “As goes General Motors, so goes the country.” which has been pretty much true in the past year or so.

In another survey, Informa says it expects the global net TV advertising spend this year to increase 3.7% to $116 billion with western Europe now in third place, trailing Asia Pacific and North America.

Asia Pacific ($27.9 billion) overtook western Europe ($26.7 billion) in 2009 while North America considerably led the world at $38.9 billion. This year’s results will benefit from the World Cup and the Winter Olympics (there was no major global sporting event in 2009) but the really big TV year is expected to be 2012 with the London Summer Olympic Games and the US Presidential election.

And forecasters are ever changing their Online predictions.

The US online Q1 ad spend hit $5.9 billion, a record high for the quarter and up 7.5% from the year before, but that was still below the Q4 2009 figure of $6.3 billion. No doubt Christmas had something to do with that but since 2009 saw the first annual drop in online spending should there be some caution in the wind?

Apparently not. eMarketer has raised its full-year online projection to 10.8% over 2009, with the biggest increase expected from online video. Compare that with IDC that has lifted its forecast of a 12.6% increase this year to a whopping 19%.

And then there’s Google that is predicting that the global online advertising spend will increase by up to 50% within the next five years. Nikesh Arora, Google's president of global sales, told the UK’s Daily Telegraph, “People are shifting their spending dollars more and more to the online world – whether it be direct marketing, or advertising, or branding. And that follows industrial marketing logic which is that you have to go where the eyeballs are, where the customers are.

"The next big wave will be consumers consuming more and more video on the web, and you will see more and more brand advertising and display advertising move to the web. I personally expect in the next five to eight years 30% to 50% of advertising will be digital,” he said.

And where do you think most of that Online money is going to be transferred from? Yes. there’s a reason why print ad revenue is still declining when most others are on the way up.

See also in ftm Knowledge

Advertising – New and Improved

The advertising people are spending again. But things are different now and media people are feeling it. New media attracts attention and advertisers want to be where the action is. This ftm Knowledge file looks at the paradox of media and advertising. 92 pages PDF (September 2010)

Order here

Media in Spain - Diverse and Challenged – new

Media in Spain is steeped in tradition. yet challenged by diversity. Publishers hold great influence, broadcasters competing. New media has been slow to rise and business models for all are under stress. Rich in language and culture, Spain's media is reaching into the future and finding more than expected. 123 pages, PDF. January 2018

Order here

The Campaign Is On - Elections and Media

Elections campaigns are big media events. Candidates and issues are presented, analyzed and criticized in broadcast and print. Media is now more of a participant in elections than ever. This ftm Knowledge file reports on news coverage, advertising, endorsements and their effect on democracy at work. 84 pages. PDF (September 2017)

Order here

Fake News, Hate Speech and Propaganda

The institutional threat of fake news, hate speech and propaganda is testing the mettle of those who toil in news media. Those three related evils are not new, by any means, but taken together have put the truth and those reporting it on the back foot. Words matter. This ftm Knowledge file explores that light. 48 pages, PDF (March 2017)

Order here

More ftm Knowledge files here

Become an ftm Individual or Corporate Member to order Knowledge Files at no charge. JOIN HERE!