Marketing via measured media dropped 3.7% vs. the same period in 2007, according to TNS Media Intelligence's January-to-June spending report, with overall ad dollars down 1.6% for the first half of the year.
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So what's the outlook for the rest of 2008? TV sellers and buyers are cautiously optimistic that the Olympics and the election will boost third- and fourth-quarter spending, even though the Olympics will benefit only NBC properties and most election ad money is being spent at the local station level in battleground states. But as Jon Swallen, senior VP-research at TNS Media Intelligence, said, the picture is still unclear for magazines, newspapers, internet, radio and outdoor. "It's not a case of a rising tide that lifts all boats. It's a very selective tide that hits certain parts of the wave."
This year's broadcast upfront may have finished higher than all industry expectations, with advertisers shelling out $9.2 billion to secure TV time, but the networks were left with less inventory to sell and therefore less-advantageous price points for last-minute scatter ads in the fourth quarter. One TV sales executive said, "It's very possible that TV will produce good ratings, relative to last year's performance because of the writers strike, [but] I'm not so sure there's a lot of money to chase those [ratings] points out there."
'Happy to take the money'
Bill Koenigsberg, CEO of Horizon Media, said, "In general, we all know the current media marketplace is one of currently less demand than supply. I think they'd be happy to take the money, and we haven't seen any significant spike in pricing."
Mr. Swallen said that of the money held back in the first half of 2008, "some of that wasn't going to the networks, some of it was being held to boost the company's bottom line and some was going to cheaper media." Among those that got a boost were radio, which saw a 3.4% increase in spending at the network level from recession-plagued categories such as automotive and retail, and outdoor, which grew 1.8%.
Internet display, while still the fastest-growing media sector from a spending standpoint, may continue to take a backseat to TV now that broadcast prime time is inexpensive enough for package-goods powerhouses such as P&G and Kraft to shell out for some of their smaller brands. "The leaders in the marketplace are still going to look for new ways to demonstrate that leadership," said the TV sales executive. "Absolutely if you're a leading advertiser, you're much less interested in trying to see whether an ad network is going to produce the proper efficiency for you."
Mr. Swallen said the rate of growth in internet display has been slowing in recent months, having traditionally posted quarterly growth rates as high as 14% only two or three years ago. "It could be one of two scenarios," he said. "Display advertising is losing favor with advertisers relative to other digital internet ad forms, like search or video. So perhaps search is becoming the ugly cousin, relatively speaking. Or it could be sort of a bellwether indicator indicative of the malaise in ad spending across the board, with advertisers cutting back on internet display the same way they're cutting back on TV, magazines, etc."
Although online-video advertising is beginning to gain marketplace traction as a viable alternative to TV spending, Mr. Swallen said he doesn't see it as a big threat to display just yet. "I don't think video is in a position where it's siphoning off huge amounts of money from other internet advertising forms. It certainly has the potential to do so. The scale's just not quite there yet."