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U.S. Ad Spending Fell 2.6 Percent in 2008, Nielsen Reports

NEW YORK, NY March 13, 2009 – The Nielsen Company reported today that U.S. advertising for the full year 2008 was down 2.6% compared to the full year 2007. According to preliminary figures from Nielsen, U.S. ad expenditures declined almost $3.7 billion to a total spend of $136.8 billion in 2008.

Hispanic Cable TV (+9.6%) and Cable TV (+7.8%) were the only two media to show ad growth in 2008. Cable was the highest revenue-generating medium with $26.6 billion in sales.

Media Category

Jan-Dec ’08 vs.

Jan-Dec ’07 % Change

Hispanic Cable TV

9.6%

Cable TV

7.8%

Spot TV Top 100

-0.3%

Syndication TV

-0.8%

National Sunday Supplement

-1.9%

Hispanic Broadcast TV

-2.4%

Network Radio

-3.3%

Broadcast Network TV

-3.5%

Local Magazine

-3.7%

Spot Radio

-4.0%

Spot TV 101-210

-4.6%

Outdoor

-5.0%

FSI Coupon

-5.2%

Internet*

-6.4%

National Magazine

-7.6%

National Newspaper

-9.6%

Business to Business

-9.7%

Local Newspaper

-10.2%

Local Sunday Supplements

-11.0%

TOTAL

-2.6%

Source: The Nielsen Company

** Internet advertising expenditures account for CPM-based, image-based advertising. These reported estimated expenditures do not account for paid search advertising, text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream (“pre-rolls”) players, messenger applications, partnership advertising, promotions and email campaigns, compound image/text ad or house advertising activity.


“Given the state of the U.S. economy, a decline in ad spending was expected, but it’s not as bad as it could have been,” said Annie Touliatos, VP of Sales Development for Monitor-Plus, Nielsen’s ad tracking service. “The campaign season and the Summer Olympics were two big events that had a tremendous impact on advertising, especially on TV buys.”           

Print media continued its anticipated decline in 2008. Local and National Newspaper ad spends declined 10.2% and 9.6%, respectively. National Magazines fell 7.6%, while Local Magazines dropped 3.7%.

New media was also hit by the tough economic climate. Internet ad spends dropped 6.4% and Network TV took a 3.5% hit. Nevertheless, television continued to be the dominant medium for advertisers, with 60% of all ad dollars spent on Network, Cable, Hispanic, or Spot TV.

Spanish Language TV (network and cable) advertising continued to grow at a clip of 0.8%, while African-American TV fell 3.4%.

ADVERTISER SPENDING  
The top 10 advertisers spent a total of $15.5 billion in 2008 – 15% less than the year before. Not a single one of the top 10 advertisers spent more in 2008 vs. 2007. Procter & Gamble maintained its perch as the top advertiser this year, despite a 19% decline vs. 2007.

Detroit’s Big Three automakers held on to spots in the top 10, despite double-digit percentage slashes in their ad budgets. Cerberus Capital Management (Chrysler) and Ford Motor Co. cut advertising 31% and 29%, respectively. General Motors trimmed its advertising 15%. Foreign automakers Toyota and Honda each made the top 10, but they, too, slashed their ad spend 7% and 3%, respectively.

Parent Company

Jan – Dec 2008

(millions)

Jan – Dec 2007

(millions)

% Change

Procter & Gamble Co.

$2,848.2

$3,531.1

-19.3%

General Motors Corp.

$2,117.7

$2,488.6

-14.9%

AT&T Inc.

$1,662.7

$1,792.1

-7.2%

Verizon Communications Inc.

$1,614.8

$1,636.3

-1.3%

Toyota Motor Corp.

$1,555.0

$1,665.0

-6.6%

Ford Motor Co.

$1,416.1

$1,981.6

-28.5%

Johnson & Johnson

$1,211.0

$1,280.1

-5.4%

Time Warner Inc.

$1,077.4

$1,411.4

-23.7%

Honda Motor Co.

$1,016.6

$1,045.9

-2.8%

Cerberus Capital Mgt. (Chrysler)

$1,002.6

$1,456.7

-31.2%

Total Top 10

$15,522.1

$18,288.8

-15.1%

Source: The Nielsen Company
Note: Data does not include Internet or B-2-B Spending

            No fast food parent companies cracked the top 10. But Yum! Brands (11th), parent company of Taco Bell and KFC, spent $5.6 million more on advertising in 2008, while McDonald’s (13th) boosted its ad spend $5 million.

            Wal-Mart (19th) showed perhaps the most impressive ad growth in 2008. The retail giant increased its spend 55% over the previous year with $771 million in ad buys.

PRODUCT SPEND
The automotive industry’s ad spending fell hardest in 2008. The industry slashed its spending by almost $1.8 billion, or 15.5%.

Pharmaceuticals also cut back its spending significantly, declining 18% and almost $1 billion compared to 2007. Quick Service Restaurants, however, was the only category in the top 5 to spend more in 2008, with 3.8% more expenditures in 2008. Direct Response placed 8th, having grown its ad spend 9.2%, thanks to increased spending by companies like Video Professor (+389%), Allstar Marketing (+318%) and Rosetta Stone (+73%)

Product Category

Jan – Dec 2008

(millions)

Jan – Dec 2007

(millions)

% Change

Automotive

(Factory & Dealer Assoc.)

$10,016.1

$11,854.4

-15.5%

Pharmaceutical

$4,344.1

$5,325.3

-18.4%

Auto Dealerships – Local

$4,198.3

$4,604.6

-8.8%

Quick Service Restaurant

$4,080.5

$3,932.8

3.8%

Department Store

$3,890.9

$3,994.2

-2.6%

Wireless Telephone Services

$3,431.4

$3,731.6

-8.0%

Motion Pictures

$3,322.1

$3,750.6

-11.4%

Direct Response Product

$2,576.9

$2,358.9

9.2%

Restaurant

$1,618.6

$1,619.4

0.0%

Furniture Stores

$1,580.8

$1,636.2

-3.4%

Top 10 Product Categories

$39,060.0

$42,808.1

-8.8%

Source: The Nielsen Company          
NOTE: Data does not include Internet or B-2-B spending.