As 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 a 3.8% increase in U.S. ad spending year-over-year, according to The Nielsen Company. For radio and television, the good news was in network; the bad news was in spot. Network Radio is up 0.61%; Network TV up 8.52%; Spot Radio was down -2.23% and Spot TV was down some -3.25%.
The U.S. market, which faced six straight quarters of declines in ad spend, has seen a turnaround in 2010. In total, advertisers spent an estimated $54 billion during the first half of 2010. 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.
| 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% |
| *Excludes Internet spending. Source: The Nielsen Company | |||
Overall, there was a 3% increase in the top 10 product categories, with the largest growth by far seen in automotive (+27%) and auto insurance (+23%). 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.
“Not surprisingly, auto ad spending is closely tied to auto sales given that those sales dollars enable increased marketing expenditures,” said Sallie Hirsch, SVP of Research for Nielsen’s automotive unit. “Last year was abysmal for the auto industry as economic factors drove down sales to very low levels. Now that we’re seeing an improvement in the market and consumers are more willing to open their wallets, car sales have started to rebound and that’s what’s driving the increase in ad spending for 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 first half of the year, 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 the first half of 2009.
Print 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% |
| *Excludes Internet spending. Source: The Nielsen Company | |||
