Rate of decline in global ad spend slows


There is some good news coming after all of the first half declines: The global ad market showed signs of bottoming out in Q2 of the year, with the rate of decline in spending slowing slightly from the previous three months, Nielsen reported. Nielsen said spending in 27 countries, accounting for the vast majority of advertising worldwide, declined by 5.8% in Q2 compared with a year earlier, after a 7.9% drop in Q1.

The figures mesh with recent assessments by advertising executives, who say the worst is probably over, while cautioning that any marked upturn is probably unlikely before next year, reported the NY Times:

“Spending in the first half was strongest in Asia, where it rose by 2.2%, the survey showed, and weakest in North America, where it fell by 15.9%. Outlays in Europe fell by 9.1%.

The survey gauges spending across most traditional media, but not the Internet, which has generally held up somewhat better during the economic crisis.

A separate report published Wednesday by the Internet Advertising Bureau of Britain, a trade group, showed that online ad spending overtook television in the first half, accounting for 23.5% of the ad market, compared with 21.9% for TV. The print media, with 30% of spending in the first half, remained in the overall lead, despite showing the biggest declines.

“Online is definitely increasing its share quite strongly throughout Europe,” said Eva Berg-Winters, an expert in online advertising at PricewaterhouseCoopers, which compiled the numbers for the Internet Advertising Bureau.

British marketers were quick to embrace the medium, but the market share of online advertising in Britain is also elevated for another reason: television ad spending is low in Britain relative to the overall size of the ad market because the biggest TV broadcaster, the BBC, accepts no advertising.

While television has suffered during the economic downturn, analysts say it could rebound more strongly than other traditional media, like newspapers. Ms. Berg-Winters said she would not be surprised if television reclaimed a larger share of the British ad market next year, edging past the Internet.

“Before we say TV is dead, we have to realize that much of the market share that online took was from other media, not TV,” she said.

Growth in online advertising in Britain was driven in the first half by increased spending on ads in search engines like Google. Such ads accounted for about 60% of the total spent online and increased by 6.8%. Spending on online classified ads also rose, but online display advertising — banners, video ads and the like — fell by 5.2%.

The Nielsen report on global spending showed weakness across most traditional media, though magazines performed worst. Among marketers, carmakers and financial institutions cut back most sharply on spending, with retailers, consumer product companies and health-care advertisers actually advertising a bit more.”