The continuing instability of the macro economy is beginning to wear on the people who spend money to stimulate it. After a couple of years of positive momentum, the optimism of advertisers and agencies to invest in advertising over the next 12 months has once again begun to plummet, and is now at its lowest level in two years. That’s the finding of a special survey of ad executives conducted by Advertiser Perceptions Inc. in October in an effort to gauge whether the faltering economy has been taking its toll on future ad budgeting expectations.
While the overall sentiment continues to be on the plus side of the optimism/pessimism ledger sheet, AIR’s optimism index declined six points to a nine in October from a 15 during its last regular semi-annual survey in the Spring.
The index represents the difference among the percentage of respondents who plan to increase or decrease their ad spending over the next 12 months, and it had been building steady positive momentum ever since it bottomed out in the Spring of 2009 with an index of minus 5.
On the bright side for the digital media economy, most of the negative sentiment is focused on traditional media – especially newspapers and magazines – while digital and especially mobile media continue to build ad budget confidence. Cable network TV also is building momentum.
“Following our Spring wave, what seemed to be an improving economy abruptly took a turn for the worse – i.e. unemployment, the European Union, etc. – so in early October, we went back into the field with a smaller survey in order to get an interim read on advertiser optimism,” explains Ken Pearl, CEO of AIR.
AIR had begun doing monthly tracking of advertiser optimism during the last U.S. economic recession, but discontinued its monthly tracking when the economy began to expand again.
Pearl says the two big “takeaways” for its most recent survey are “half-empty” and “half-full,” or what might better be described as a tale of two media marketplaces: traditional and digital.
“The slowing economy is driving a positive shift in advertiser optimism for digital, mobile and cable TV media,” he explains.