U.S. Ad Market Sputters

Posted on 3/25/2008 by Julia Dudnik Stern | Printable Version | Comments (0)

The latest report from TNS Media Intelligence, a research firm specializing in advertising and marketing information, says the ad market continued to sputter at the end of 2007. The year ended with $148.99 billion in ad revenue, a 0.2% increase of ad spending since 2006. TNS senior vice president of research Jon Swallen describes the market as stalled and "engulfed by the spreading pessimism about general economic conditions."

The outlook is not encouraging. Fourth-quarter 2007 spending fell by 0.1% from a year before. Growth rates slowed, and paces of decline accelerated. Early 2008 figures suggest growth rate for measured ad spending is not changing. Even with the boost from U.S. elections and Beijing Olympics, marketers remain cautious with core ad budgets.

The Internet continues to exhibit the highest growth rates, increasing by 15.9% to a total of $11.31 billion during 2007. Consumer magazines, cable TV and outdoor advertising are also growing at a respective 7%, 6.5% and 4.9%. Conversely, spot TV and radio have posted the highest year-over-year revenue losses.

While Spanish-language TV is still growing at a modest 1.5%, network and syndication are declining at roughly the same pace. Spot TV is the biggest loser, dropping 10.2% from record-setting political ad spending of 2006.

The magazine category has grown by 5.5%. Spanish-language publications lead with 10.4% growth, followed by Sunday titles with 7.2%. However, business-to-business and local pubs are declining by some 4% each.

Newspapers and radio, both already in critical condition, are losing revenue at faster speeds. Newspapers declined by 5.6% overall, with even Spanish-language titles down by 2.5%. Radio ad revenues are down by 3.5%. National spot radio follows spot TV as the second-poorest performing category, with a 7.1% loss of revenue since 2006.

TNS noted significant spending reductions by automotive, media and retail advertisers. Overall, marketers are reigning in ad spend, a reflection of consumer belt-tightening. Even fastest-growing media categories, such as Spanish-language media, are showing signs of slowing.

Copyright © 2008 Julia Dudnik Stern. 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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