Ad Spend Remains Below 2007 Peak, 2012 Recovery Mild

U.S. advertising spending still hasn’t returned to the levels it attained in the frothy credit bubble economy during the middle of the last decade, and probably won’t for several more years, according to forecasts from four different research and analysis outfits.

While their numbers vary somewhat, due to the inclusion or exclusion of certain channels, like direct marketing, the figures from Kantar, ZenithOptimedia, Nielsen and GroupM note that ad spending followed the economy over a cliff from 2007-2009. Its recovery from 2010-2012 has been just as lackluster.
 
According to Kantar, total U.S. ad spending plunged from $158.2 billion in 2007 to $142.9 billion in 2008 and a low of $125.3 billion in 2009, for consecutive annual declines of 9.7% and 12.3%, respectively.

As the economy bottomed out and slowly began to recover, ad spending edged up 4.6% to $131.1 billion in 2010, then jumped 9.8% to $144 billion in 2011. But the rate of growth slowed considerably in the last year. Kantar is currently forecasting 2.2% growth to around $147 billion in 2012 -- still 7% short of its 2007 level.
 
ZenithOptimedia pegs total U.S. ad spending at $177.6 billion in 2007, $172.5 billion in 2008, $157 billion in 2009, and $151.7 billion in 2010 (which puts the low point a year later than Kantar), for consecutive annual declines of 2.9%, 9%, and 3.4% over this period. In 2011 ad spending increased 1.6% to $154.2 billion, according to ZO, followed by a forecast 4.3% increase to $161 billion in 2012 -- 9.3% below 2007.
 
Nielsen’s figures for total U.S. ad spending follow a similar arc, from $140.5 billion in 2007 to $136.8 billion in 2008 and $117 billion in 2009, for consecutive annual declines of 2.4% and 14.5%. Ad spending edged up 5.6% to $123.6 billion in 2010, then eked out 2% growth to $126.1 billion in 2011. If Nielsen’s figures for the first three quarters of 2012 are good indicators, 2012 might see growth of up to 4%, for a total $131 billion; that’s 6.8% below 2007.
 
Finally, GroupM had ad spending basically flat from 2007-2008, slipping around 0.4% from $162.6 billion to $161.9 billion, before plummeting 13% to $141 billion in 2009. And again, recovery has been painfully slow, with a 1.1% increase to $142.5 billion in 2010, followed by a 3.3% increase to $147.2 billion in 2011 and a forecast 3.6% increase to $152.5 billion in 2012 -- still down 6.2% from 2007.

Nor will U.S. ad spending return to its previous heights in the new year, according to GroupM, which forecasts a roughly 3% increase to $157.2 billion in 2013.

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