US ad spending down 14% in first half, but FSIs and Internet see gains

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Total measured advertising spending during the first half of this year dropped 14.3% to $60.9 billion, compared with the same period in 2008, according TNS Media Intelligence. The data, released September 16, also reveals ad spending during the second quarter was down 13.9% compared to the same period of last year, representing its fifth consecutive quarter of year-over-year declines.

“Ad spend declines have flattened out at around -14% to -15%,” said Jon Swallen, SVP of research at TNS Media Intelligence, in an e-mail to DMNews. “[There are] no indications of it worsening; there are some preliminary signs that losses are beginning to narrow in the third quarter.”

He added: “If you're a glass-half-full optimist, a smaller decline is perceived as a positive. If you're a glass-half-empty pessimist, the fact that small gains could still leave us with double-digit losses means the market still has a very deep hole to climb out of.”

Internet display, up 6.5%, and free standing inserts, up 4.6%, were the only media with expenditure growth in the first half. Both benefited from larger budget allocations by consumer packaged goods marketers, according to TNS. Online publishers also capitalized on a spending surge from wireless telecom operators. Meanwhile, print, radio, and broadcast and cable were all down.

The increase in FSI spending “reflects more couponing activity from packaged goods manufacturers,” Swallen added.

“[Marketers are] attempting to capitalize on price sensitivity among recession-affected consumers,” he added. “For the Internet, it's a continuation of an enduring trend: advertisers moving money to less expensive digital media channels, which also offer greater ROI.”

Data was also detailed by category. Direct response, which TNS defines as a product category rather than a media type, ranked as the fifth-largest advertising category by spending, with a total of $3.3 billion. That number is down 14.3% compared with the first half of 2008.

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