THUNDER BAY – Business Now – The U.S. ad economy is continuing to expand, but like the general economy, it appears to be losing some momentum, according to new data released this morning by WPP’s Kantar Media unit. The data, which is based on ad spending in the major media that Kantar monitors, expanded 2.8% during the second quarter of 2011, the most recent period it has released data for. That compares with a growth rate of 4.4% in measured media ad spending during the first quarter of the year.
Kantar Senior Vice President Research Jon Swallen attributed the slowdown mainly to the nation’s biggest advertisers, which slammed the brakes on their ad budgets during the second quarter, most likely in reaction the macro economic slowdown, and continued uncertainty over the job market the financial industry.
“Advertising grew at a slower rate in the second quarter, contributing to speculation about the durability of an advertising recovery that is into its second year,” Swallen stated, adding, that “key ad spend indicators are painting a mixed picture.”
Almost all of the growth during the second quarter, he said, came from small or mid-sized advertisers.
While Kantar’s total measured media ad spending rose 3.2% to $71.5 billion during the first half of 2011, budgets for the top 10 advertisers actually fell 0.5% from the first half of 2010. Among the top 100 marketers, a diversified group accounting for more than two-fifths of all measured ad expenditures, budgets rose a “miniscule” 0.8%, Kantar reported.
Procter & Gamble remained the nation’s largest advertiser, despite the fact that its total ad spending fell 7.8% $1.383 billion. Kantar noted that P&G has been shifting budgets into Spanish language media and Internet display at the expense of consumer magazines, network TV and cable TV.
AT&T was the second largest advertiser for the half year period with expenditures of $1,130 billion, a decline of 2.6 percent. Since the March 2011 announcement of its agreement to purchase T-Mobile, AT&T ad spending has slowed sharply. At competitor Verizon Communications, first-half ad budgets were $808.7 million, a decrease of 22.5% and the biggest percentage decline among the top ten marketers.
As tepid as it is, Swallen said the growth in U.S. ad spending appears to be benefitting a “majority of media types,” but especially online media. According to Swallen’s analysis, “Internet media” accounted for more than one-half of the dollar gain in total ad expenditures during the first six months of the year.
Online display ad spending jumped 12.9%, and for the first time since it began reporting online ad spending, Kantar released data for paid search advertising, estimating that it rose 8.6% during the first half. Kantar said both online display and search benefitted from “a surge of money from the travel, local service and insurance categories.”
(c) 2011 MediaPost Communications U.S. Ad Expansion Slows Down As Largest Advertisers Hit The Brakes by Joe Mandese originally appeared in Online Media Daily on September 12, 2011.
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