Commentary

More Confidence, More Advertising

According to figures recently released by The Nielsen Company, global ad spending continues a steady climb to recovery in the first half of 2010. Advertising in the world's largest market is also seeing signs of growth, with advertisers spending an estimated $54 billion during the first half of 2010, a 3.8% increase in U.S. ad spending year-over-year.

In total, the increase in U.S. advertising reflects a modest improvement in U.S. consumer confidence in the first half of the year, as advertisers look to highlight value deals and increase promotions in the hopes of spurring consumer spending. However, with confidence still well below pre-recessionary levels, automotive was one of only a few bright spots in the top 10 product category ad spending, says the report

U.S. Ad Spend by Sector

Category

Quarter 1, 2009 - Quarter 2, 2009-$$$

Quarter 1, 2010 - Quarter 2, 2010-$$$

% Change

Automotive

3,491,438,000

4,431,709,000

26.93%

Pharmaceutical

2,090,707,000

1,998,762,000

-4.40%

Motion Picture

1,645,751,000

1,592,196,000

-3.25%

Telephone Services - Wireless

1,758,535,000

1,518,600,000

-13.64%

Restaurant

805,082,000

824,978,000

2.47%

Restaurant - Quick Service

2,114,925,000

2,024,575,000

-4.27%

Dealerships

1,634,702,000

1,602,897,000

-1.95%

Department Store

1,516,520,000

1,591,149,000

4.92%

Products - Direct

933,141,000

828,155,000

-11.25%

Auto Insurance

623,212,000

764211,000

22.62%

Total

16,614,018,000

17,177,235,000

3.39%

Source: The Nielsen Company, October 2010

Overall, there was a 3% increase in the top 10 product categories, with the largest growth by far seen in automotive and auto insurance. The automotive advertising was driven largely by increased spending by General Motors which was up 73% over 1H09. Ford and Toyota also grew their ad spending by 15% and 22% respectively. An increase of 82% for UAW Health Care Trust contributed to the first half growth in the auto insurance category. All other categories, except department stores (+5%) and restaurants (+2%) showed declines in the first six months of the year.

Regional Changes in Advertising Dollars (% Change 1stH 2010 vs. 1stH 2009)

Region

% Increase in 2010

Global Average

12.8%

North America

4.7

Asia Pacific

12.1

Europe

8.5

Latin America

44.5

Mid East/Africa

23.8

Source: The Nielsen Company, October 2010

Looking at ad spending across media types, U.S. television (network, cable, syndication, spot, Spanish Language network and Spanish Language cable) continues to dominate, accounting for $33.8 billion in advertising during the 1H10, a 6% increase over last year. Spanish language network TV and Cable TV in particular saw the biggest gains, up 24% and 13% respectively over 1H09.

Print media overall (national and local magazines, newspapers, Sunday supplements and B2B) was flat, however, national Sunday supplements received a significant uptick with 20.5% growth over last year. National magazines were also up 7.4%. Alternatively, local Sunday supplements and national newspapers declined 7.9% and 6.9% respectively.

U.S. Ad Spend by Media Type

Media Type

Jan-Jun 2009

Jan-Jun 2010

% Change

Business to Business

$1,305,504,250

$1,054,525,521

-19.22%

Cable TV

$8,063,091,000

$9,108,321,000

12.96%

FSI Coupon

$246,535,406

$253,643,516

2.88%

Local Magazine

$215,200,797

$198,596,922

-7.72%

Local Newspaper

$5,175,683,500

$5,187,628,000

0.23%

Local Sunday Supplement

$26,757,018

$23,533,229

-12.05%

National Magazine

$7,261,397,500

$7,425,700,500

2.26%

National Newspaper

$603,244,125

$668,556,625

10.83%

National Sunday Supplement

$460,186,281

$559,376,875

21.55%

Network Radio

$491,766,875

$494,776,188

0.61%

Network TV

$10,587,809,000

$11,489,960,000

8.52%

Outdoor

$1,506,906,750

$1,530,320,000

1.55%

Spanish Language Cable TV

$205,042,672

$202,412,703

-1.28%

Spanish Language Network TV

$1,326,478,750

$1,646,938,375

24.16%

Spot Radio

$2,572,394,500

$2,514,994,000

-2.23%

Spot TV

$10,637,725,000

$10,292,083,000

-3.25%

Syndicated TV

$1,096,335,750

$1,107,379,875

1.01%

Total

$51,782,059,174

$53,758,746,329

3.82%

Source: The Nielsen Company, October 2010

For additional information from Nielsen, please visit here.

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