Ad Budget Pessimism Bottoms Out, Top Ad Execs Upbeat

Posted on 5/18/2009 by Joe Mandese | Printable Version | Comments (0)

Pessimism over the future advertising plans of advertisers and media-buying executives appears to have bottomed out, or is at least leveling off, according to the most recent in a series of every-other-month surveys being conducted among ad executives following the economic meltdown. The surveys, dubbed the "Advertiser Optimism Reports," are being conducted by Advertiser Perceptions Inc., and the most recent one, conducted in March and April among 1,599 agency and marketer executives, shows a marginal improvement from two months ago.

Twenty-nine percent of ad executives now expect to boost their overall ad budgets over the next six months, while 29% expect to decrease them. Two months ago, only 26% planned to boost their ad budgets, while 30% planned to cut them.

"Overall, it looks like we're reaching neutral, or a leveling-off point in time," says Ken Pearl, a partner and founder of API, adding that when you drill into the findings, the outlook may be even brighter because the optimism of higher-level marketing executives (director, vice president and CMO), "the ones that control the purse strings," is actually slightly stronger than the overall average.

But Pearl noted that when you look across the major media, "the devil is in the details," and the outlook is brighter for some than others.

Digital media such as online display, online search and mobile are the strongest, with more than half of all respondents anticipating a boost in those ad budgets, while traditional media such as TV, radio, outdoor, newspapers and magazines all are still mainly in negative territory. The traditional medium to show the greatest relative improvement has been cable and broadcast TV, as print media and radio continue to wane.

The stabilization of advertising sentiment—particularly for TV advertising budgets—may be good news coming on the eve of the annual network upfront advertising marketplace, and the most recent API survey also finds that a "ray of optimism" among upper-level marketing executives regarding their 2009-10 upfront advertising plans.

Asked whether they plan to increase, decrease or maintain their upfront network TV ad budgets, only 19% of the overall survey said they expected to increase them, but 37% of upper-level marketers planned to boost them.

"For the upfront, the upper level marketers who control the budgets are more upbeat about the upfront," said API's Pearl. "It could be that the agencies and the lower-level marketing executives are posturing, or they don't really know about the budgets."

Copyright © 2009 Joe Mandese. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


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