Ad Spending May Be Flat, but It's Not the Whole Story

An Ad Age Editorial

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Ad spending was flat in 2007. We could break out the casket and mourn an industry that has one foot in the grave. Or we could take the broad view.

Yes, U.S. measured media spending last year climbed a negligible 0.2%, according to TNS Media Intelligence. But that figure presents an incomplete picture.

Ad Age has long advocated looking beyond simple "ad spending." Our 100 Leading National Advertisers report has defined advertising as measured media plus "unmeasured" spending since we introduced the ranking in 1956. In our June 2007 report, we noted that measured media for the top 100 advertisers rose 0.6% in 2006. Unmeasured spending -- including direct marketing, promotion and internet paid search -- jumped an estimated 6.9%. As a result, total spending for the top 100 rose an estimated 3.1% in 2006.

Ad Age hasn't yet published its 2007 analysis, but it's reasonable to expect that unmeasured disciplines will continue to see better growth. In weighing the health of the marketing world, it's prudent and necessary to look beyond spending in old-line media.

Of course, that last line is the rub. Flat ad-spending numbers are bad news for some, particularly old-line media.

But we shouldn't feel sorry for those old-school companies just yet. That 0.2% "growth" in 2007 still represents a $149 billion industry. Still, traditional media spending is unlikely to see huge growth any time soon. Those days are behind us.

Even the most hide-bound of media companies are sniffing out new opportunities. The TNS numbers showed online ad spending (excluding paid search) continued to grow faster than spending in any other medium, notching a 15.9% increase to reach $11.3 billion.

Factor in search and other emerging areas, and marketing growth looks far stronger.

The way an industry sees itself can affect its future. If the entire marketing industry portrays itself as a dying business, it can be a self-fulfilling prophecy. It could lose clout in Washington, in news media, in classrooms where kids plot their careers and among consumers who buy the stuff being advertised.

We're not suggesting that everyone buy a pair of rose-colored glasses. What we are suggesting is that if we take a broader view of spending on marketing, things might not look so bad. Just because your piece of the pie isn't as big as it used to be doesn't mean the pie isn't there -- or that it isn't getting bigger.
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