DMN3 Blog

Advertising expenditures were remarkably lower in 2009, compared to 2008, as the world-wide economic recession translated into an advertising recession as well. First quarter 2010 advertising expenditures reflect an advertising recovery and a renewed sense of confidence by marketers that the economy is heading in the right direction.

Dismal 2009: According to Kantar Media, a leading provider of marketing information, dollars spent on advertising declined 12.3 percent in 2009 compared to 2008. Expenditures on advertising totaled 125.3 billion dollars in 2009.

Only two media types experienced overall growth in advertising expenditures in 2009: Internet display advertising increased 7.3 percent in 2009 and free standing inserts were up 3.0 percent by way of increased use of coupon campaigns

As the economic recession eased in the latter part of 2009, the advertising recession eased as well with a spending decline of 6.0 percent in the fourth quarter compared to the year earlier. Expenditures for all media improved in the fourth quarter compared to the first three quarters of 2009.

Real Growth in 2010: Results for the first quarter of 2010 now reflect real growth in advertising for the first time in two years. The growth in advertising expenditures signals a belief by marketers that consumer spending will be increasing as the economy recovers. Advertising budgets are increasing as companies seek to maintain their brands as consumers become more active.

Little Guys Still on the Sidelines: Spending was up 11 percent in the first quarter among the top 100 advertisers, totaling 14.89 billion dollars. This varied group represents nearly half of the measured ad economy.

This contrasts with smaller advertisers (those outside the top 100) that posted a 1.1 percent decline in their advertising media expenditures. This group, with smaller advertising budgets, seems to be waiting on more sustained and positive data about consumer activity before increasing their advertising budgets.

It should be noted that research has shown that increased marketing during a recession can result in a sustained growth in market share. You can access my writing on this subject here:

Marketing During a Recession: Results are Predictable

Marketing During a Recession: Additional Thoughts

The increase in spending on advertising is a broad one, with most advertising mediums experiencing growth. Although some media sectors have benefitted more than others - of the 19 media types tracked by Kantar, 13 experience positive growth during the first quarter of 2010.

The table below provides the percent change in measured ad spending based on Kantar Media Strategy™ multimedia ad expenditure database.

We should expect to see advertising expenditures to continue to increase for the remainder of 2010, unless there is an unexpected retrenchment in consumer confidence and spending.