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Third Quarter Ad Spending Slowed

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Advertising spending in the third quarter of 2011 barely moved, according to a report that was released the week of Christmas, per the New York Times. Compared with the third quarter of 2010, advertising spending did inch forward for American advertisers.

The report was issued by the Kantar Media unit of WWP, and it confirms suggestions that were recently made by advertising forecasters that the brakes had been applied in July, August, and September by marketers.

According to Kantar Media, advertising spending increased slightly, by 0.4 percent, even though many thought it would decline for the first time since 2009. Jon Swallen, the senior vice president for research at the Kantar Media North America unit of Kantar Media in New York, said, “the largest marketers have become even more conservative with their ad budgets. The pullback offset the healthy spending growth occurring among midsize advertisers,” Mr. Swallen said.

Eight of the ten largest advertising spenders in the third quarter reduced their outlays when compared with the same time frame from 2010. The combined numbers for the top ten was a 3.3 percent decline. Proctor and Gamble, which is the nation’s largest advertiser, and the second biggest, AT&T, cut their advertising spending in the quarter by 0.7 percent, according to Kantar Media.

Pfizer (number 9) dropped 11.9 percent and General Motors (number 3) dropped 11.1 percent in the quarter, the largest drops by members of the top ten this year. The only two companies to increase their spending in 2010 were L’Oreal (number 6) by 18.1 percent and the Chrysler Group (number 8) by 9.2 percent.

The growth of 0.4 percent in 2011 shows the pattern of the quarters this year, as growth in advertisement spending declined each quarter so far this year. Increases of 4.1 percent occurred in the first quarter and 2.8 percent in the second quarter. Kantar Media reported that in the first nine months of 2011, advertisement spending rose by 1.5 percent from the same nine months of 2010.

Advertising spending has grown in the United States for seven consecutive quarters since 2009 ended with the miniscule growth in the third quarter of this year. The 0.4 percent increase is the smallest gain of all seven quarters.

One newspaper media increased in the third quarter, Spanish-language newspapers, which increased by 2.9 percent. Nationally published newspapers fell 0.3 percent and local newspapers fell 4.4 percent in the third quarter.

One of the most common growth categories, internet media, saw a decline in the third quarter of 2.9 percent. There was a gain in display advertising of 15.8 percent that was offset by a drop in paid search of 14.4 percent in the third quarter.

The remaining media categories and their results are as follows: television media, up 3.2 percent; magazine media, down 1.2 percent; radio media, up 1.1 percent; outdoor media, up 3.2 percent.

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Authored by: Harrison Barnes