U.S. ad spend down 14.3% in first half

Yes, 14.3% versus a year ago, to $60.87 billion, according to TNS Media Intelligence. Ad spend during Q2 was off 13.9% compared to last year, the fifth consecutive quarter of YOY declines. Radio was down a whopping 24.6% due to ongoing weakness in automotive, retail and local services. Network TV declined 5.5% and Cable TV slipped 3.6% in the first half. For both, Q2 results were slightly worse than Q1. Spot TV spend dropped 27.1%, buffeted by the slump in auto and retail activity.

“The rate of decline in ad spending was level throughout the second quarter,” said Jon Swallen, SVP Research at TNS. “While it’s tempting to interpret this as a positive indicator that things aren’t getting worse, the fact remains that the market has been steadily tracking at around 14% declines for several consecutive months and this represents billions of lost revenue. Early data from third quarter hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures.”

Internet display (+6.5%) and FSI’s (+4.6%) were the only media to achieve expenditure growth in the first half of 2009. Each benefitted from larger budget allocations by CPG marketers. Online publishers also capitalized on a spending surge from wireless telecom operators.

Print media continued to suffer large rollbacks in ad pages from key categories and this resulted in aggregate spending declines of 24.2% for Newspaper media and 20.9% for Magazine media. Within these broad sectors, there was little difference in the performance of individual media sub-types.

The top 10 advertisers in the first six months of 2009 spent a combined total of $7,866.4 million, a 3.5% decrease from last year. Across the top 100 companies, a more diversified group of marketers representing almost one-half of total ad expenditures, spending fell by 6.2%.

Verizon Communications edged out Procter & Gamble to claim the top spot in the rankings. The telecom behemoth spent $1,188.4 million, up 3.1% from last year. Its two leading competitors also landed in the top ten. AT&T was the third largest advertiser with total ad expenditures of $976.8 million, up 6.3% versus a year ago. Sprint Nextel, after slashing its ad budgets in 2008, reversed course and spent $631.1 million, a gain of 55.3%.

Procter & Gamble slipped to second position in the rankings after reducing its half-year spending by 20%, to $1,178.4 million. The company pared its TV budgets by 30% while leaving magazine spending untouched. The only other packaged goods marketer in the top 10 was Johnson & Johnson which spent $805.9 million, up 18.0%.

General Motors had the largest budget reduction among the Top 10 with spending down 25.9% to $773.1 million and was the only auto maker to make the list.

Media companies rounded out the Top 10 with General Electric posting a spending increase of 5.1% while News Corp., Time Warner and Walt Disney each finished the period with decreases. At each of these advertisers, results were primarily shaped by their movie studio divisions.

The ten largest advertising categories in the first half of 2009 spent a total of $33,588.8 million, a drop of 14.5% from a year ago. Automotive barely held on to the top spot after expenditures plunged 31.1% to $4,449.5 million in response to depressed sales of new vehicles. Dealer spending was off more sharply than manufacturers. Through June, auto advertising is pacing at a level one-half its 2005 peak.

Heightened competition among wireless phone companies and TV service providers boosted Telecommunications category spending to $4,276.4 million, an increase of 7.5%. The only other top category to achieve a gain in the period was Restaurants, up 0.6% to $2,886.4 million.

Financial Services advertising sank 24.3% to $3,752.1 million. As consumer lending seized up, credit card companies and loan providers severely curtailed their marketing programs.

Consumer-packaged goods, traditionally looked to as a pillar of strength in advertising recessions, performed better than the overall ad market but still wound up in negative territory. The Food & Candy category slipped 4.7% to $3,031.9 million and Personal Care Products declined 9.7% to $2,662.5 million. Further down the rankings, other CPG segments also fell. Non-Rx Remedies was 5.7% lower, at $1,799.4 million. Household Products was down 2.7% to $1,027.9 million.

Elsewhere, the impact of the housing market slowdown was reflected in sharply lower ad spending from housing-related categories.