Spot TV, in Midst of Brutal Year, Eyes 2010 for Recovery

TVB Predicts Spending Could Increase Slightly Next Year

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NEW YORK ( -- As the media industry licks its wounds from the brutal first half of 2009, which saw a 15.4% plunge in ad spending, the Television Bureau of Advertising put on its rose-colored glasses as it looked to 2010.

The group, which represents local TV stations, called for a 3.6% to 6.1% increase in total spot-advertising next year, including a 1% to 3% increase in local-spot spending and a 6% to 12% lift in national-spot ads. Categories expected to drive the growth are automotive, which took the steepest decline in 2009, and political spending, as local elections play out.

But that will be a small margin of recovery after a year that's already seen spot-TV advertising drop 17.4% in the top 100 markets during the first six months, according to Nielsen, with network TV also dropping 7%. As a category, automotive posted by far the biggest drop, spending a whopping 50.3% less on spot TV during the first half of 2009 vs. the same period in 2008, according to TNS Media Intelligence.

Other categories posting significant cutbacks in spot spending include car insurance (-28.7%), furniture stores (-26.4%), bundled telecom services and products (-21%), hospitals, clinics and medical centers (-13%) and quick-service restaurants (12.8%). Cable TV providers (+34.3%), colleges and universities (+3.4%) and wireless-telecom providers (+2.5%) were the only three of the top 10 categories to increase spending during the first six months.

Although the auto industry made the biggest spending cuts of any marketing category in spot TV, national and some local TV stations benefited. National and local TV saw its share of total ad spending from the auto industry increase by 2% in the first-half of 2009 vs. full-year 2008. National TV saw its share of the auto industry's ad budget increase to 38% in the first half, compared with a 28% share in full-year 2008, while spot slid from 26% to 18% of total spending during the same period.

An optimistic sign that spending could start to recover in 2010 is the auto industry's sales-to-ad spend index, said Phil Brady, president of the National Automobile Dealers Association. After peaking at a perfect 100 index in 2004 and dipping to 88 in 2007, the auto industry has seen its marketing cutbacks start to return to healthy levels in 2009, with an estimated 95 index on track for the full year. "So the implication is, if we begin to see recovery in category sales, then advertising spend should return accordingly," Mr. Brady said. Some hopeful sales figures? The Cash For Clunkers program yielded 700,000 new car sales, 19% of which were for Toyota vehicles.

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