Ad Spending Is on the Rise, but Growth Rate May Slow
CHICAGO (AdAge.com) -- Marketers in 2011 will boost U.S. ad spending 2.8%, down slightly from 2010's 3.2% growth rate, according to the average of three major media-agency forecasts.
U.S. ad growth in 2010 turned out better than predicted. A year ago, forecasters figured 2010 U.S. ad spending would be flat or down a bit.
Forecasts for 2011 suggest moderate growth in ad spending, reflecting the economy's slow recovery.
Slow ad growth is a welcome change from the recent past: 2009 U.S. ad spending tumbled 11.9% (average of three media agencies), the biggest drop since the Great Depression.
The 18-month recession officially ended in June 2009. U.S. measured-media spending turned north in first-quarter 2010, the first year-over-year quarterly gain since first-quarter 2008, according to WPP's Kantar Media.
Marketers had a busy year of going private, going public and deal making:
- Burger King Holdings was bought by private-equity firm 3G Capital.
- Ford Motor Co. sold Volvo to a Chinese automaker, scrapped Mercury and sold most of Ford's stake in Mazda.
- Fortune Brands announced plans to spin off or sell much of the conglomerate so it can focus on distilled spirits.
- General Motors Co. pulled off the biggest initial public offering in history -- a stock sale valued at $23.1 billion, including common and preferred shares -- as it put 2009's bankruptcy in the rearview mirror.
- Kraft Foods bought British candy maker Cadbury and sold Kraft's frozen pizzas (DiGiorno) to Nestl? (Stouffer's).
- Nestl? sold its 52% stake in eye-care products firm Alcon to Novartis.
- Qwest Communications agreed to be acquired by CenturyLink.
- Unilever agreed to buy hair-care firm Alberto-Culver Co.