Interview with Ad Age Director of Data Analytics Brad Johnson:
Latest Leading National Advertisers' findings.
The 2.7% spending decline calculated by Ad Age for the 100 LNA
reflects a drop of 3.8% in measured media, tempered by a 1.2%
decline in unmeasured disciplines.
Unmeasured spending safer
The drop proves that unmeasured fields aren't immune to cutbacks,
but it's also true that unmeasured disciplines have fared better
than measured media as marketers continue to shift spending.
Media measured by WPP's TNS Media Intelligence -- such as TV and
print -- accounted for 56.5% of top marketers' U.S. ad spending in
2008, down from 57.2% in 2007, according to Ad Age's 100 LNA
report. The rest of spending came from unmeasured fields, including
direct marketing and promotion.
The overall picture for this year is shaping up to be more grim:
Measured media spending for the top 100 advertisers tumbled 8.1% in
the first quarter, according to TNS.
Moreover, Publicis Groupe's ZenithOptimedia forecasts an 8.7%
decline in U.S. media spending in 2009 and 1.7% drop next year,
with a tepid recovery -- 1.1% growth -- in 2011. It predicts U.S.
spending declines of 5.1% in 2009 and 1.4% in 2010 and then growth
of 2.4% in 2011 when it combines media spending and unmeasured
Last year's ad-spending drop may seem relatively mild. But
full-year figures smooth out the stunning declines that came after
financial markets imploded last fall.
Following GDP down
The nation officially has been in recession since December 2007,
but gross domestic product actually grew in the first six months of
2008 and slipped just 0.5% in the third quarter. The economy then
fell off a cliff: GDP plunged 6.3% in the fourth-quarter 2008 and
5.7% in first-quarter 2009.
U.S. total measured media spending followed a generally similar
trend but with deeper declines: Up 0.6% in first quarter 2008, down
3.7% in the second quarter, down 2.0% in the third quarter -- and
then down a seismic 9.2% in the fourth quarter and 14.2% in this
year's first quarter, according to TNS.
In a year of wrenching change, retail last year supplanted
automotive as the biggest ad category based on measured spending.
U.S. auto sales last year skidded 18%; auto spending dropped
The recession in automotive, and depression in Detroit,
continued this year as the government guided General Motors Corp.
(No. 4 on LNA) and Chrysler (No. 36) into bankruptcy
The U.S. government has long been a major advertiser, ranking
No. 31 on the 100 LNA based on spending for military recruitment
and anti-drug campaigns.
Thanks to bailouts, taxpayers now are big shareholders in other
major advertisers. The U.S. government owns 8% of Chrysler Group
and 34% of Citigroup, and it soon will own 61% of GM.
Taxpayers also have an 80% voting stake in insurer American
International Group following its bailout. The AIG brand last year
had measured spending of $105.7 million, just behind Colgate and
ahead of Papa John's and Tide. AIG spent heavily on ads touting its
now-discarded slogan: "The strength to be there."
Source: WPP's TNS Media Intelligence (www.tns-mi.com) and TNS's Marx Promotion
Spending based on 19 measured media, aggregated by Ad Age
DataCenter. Numbers rounded.