Internet Ad Spending Up 8%

    September 24, 2008

Total advertising spending in the first six months of 2008 decreased by 1.6 percent compared to the same period in 2007, according to a new report by TNS Media Intelligence.

Ad spending in the second quarter of 2008 was off 3.7 percent compared to last year, the sharpest quarterly drop since 2001.

"Advertising expenditures started to contract in March, well before the September turbulence on Wall Street renewed concerns about the health of the economy and possible collateral damage to the ad market," said Jon Swallen, SVP Research at TNS Media Intelligence.

"Second half results, particularly for television media, will be bolstered by the Summer Olympics and political elections. However, sustained improvement will most likely depend on a turnaround in consumer spending that rejuvenates corporate profits and encourages marketers to expand their advertising efforts."

All of the 19 measured media categories posted weaker year-over-year performance in the second quarter as compared to the first three months of 2008. For the first half of the year, Internet display advertising spending increased 8 percent as marketers continued to expand their online campaigns. Cable TV (+3.1%) and Syndication TV (+10.2%) were helped by limited exposure to the TV writer’s strike.

Spot TV spending dropped 4.4 percent as reductions in automotive, retail and telecommunications advertising offset gains from political spending. Network TV fell 2.4 percent on weaker prime time results. Newspaper media slipped 7.4 percent and radio media decreased 6.5 percent on further slowdowns in spending from auto, financial, retail and telecom categories.

"While expenditures are certainly indicative of the challenges being presented by the economy, they also suggest the continuation of the long-term trend of marketing dollars migrating to media such as the internet, cable TV and syndication that provide the ability to more effectively target specific audiences," said Dean DeBiase, CEO of TNS Media.

"With advertising budgets and CMOs under pressure and uncertainties continuing to exist relative to consumer spending, it appears marketers are placing an emphasis upon enhanced efficiencies for their brands and the ability to engage with well defined audiences to ensure ever greater return on investment."