Tuesday, March 23, 2010

Survey: Ad Spending Expected To Rebound in 2010

Stifled by the economy, ad spending in the U.S. dropped 12.3% last year, according to a report from research firm Kantar Media. The fall was triple the rate of decline compared to 2008, but analysts believe the fourth quarter of 2009 showed signs of recovery. “The advertising recession began to ease in the final two months of 2009 and preliminary figures from the first quarter of 2010, when compared against the abyss of a year ago, indicate many sectors are experiencing growth,” said Jon Swallen, senior vice president of research at Kantar. “As we get deeper into 2010, the pace of consumer activity will be a key determinant of the strength and durability of the advertising recovery.”

While analysts expect ad spending to increase by the second quarter of this year, 2009 will be remembered as a dark time for many marketers and mainstream media. Local magazines, for example, suffered through a 28% ad revenue decline in 2009 and ad sales at newspapers fell 20%. Revenue from spot sales of national radio commercials dropped nearly 25% and spot TV commercials generated 24% less revenue, according to Kantar research. However, continuing recent trends, Internet-based ad revenue actually increased 7.3% in 2009.

Among leading advertisers, Proctor & Gamble slashed ad spending by 7.3% in 2009, while General Motors increased spending by 1.3%. Additionally, Verizon cut ad spending by 7%, while Sprint Nextel expanded spending by 30%. Leading a spending charge by pharmaceutical companies, Pfizer increased ad spending by 33% last year

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