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Wall Street Crisis Hurts Wounded Ad Market

The chaos roiling Wall Street this week erases hope that a cure is on the horizon for the ailing advertising industry. The financial industry's double-digit ad spending growth through the first three quarters of 2007 has dropped to zero so far this year, per TNS.

Among the suffering financial companies, American International Group is canceling advertising commitments. TNS estimates that AIG's advertising budget last year was $118.7 million, mostly for television.

The sudden downturn will likely spark a broader advertising slowdown. "We're talking about people's money here," says TNS research chief Jon Swallen, "The state of financial services impacts consumer confidence and the overall psychology of the economy, so the largest advertising budgets are threatened. Worries about the financial sector prompt other companies to pull back, and that could have near-term impacts on the whole market."

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