New figures from CMR, a division of research giant Taylor Nelson Sofres, show first-quarter US adspend across all media plummeting 5.2% year-on-year, illustrating the depth of the current ad slump.
Over the quarter, says CMR, advertisers cut their total expenditure on advertising from $23.8 billion in Q1 2000 to $22.6bn. This trend was not confined to smaller clients – the top twenty biggest advertisers cut their adspend by 5.1% year-on-year to $4.8bn.
General Motors – boasting America’s biggest ad budget – drastically slashed its spend by 24% from $676.2 million in Q1 last year to $516.1m, reports CMR. The automaker explained that much of the reduction reflected a shift from national ad efforts to more local marketing strategies.
Another firm dramatically reducing its ad budget is tobacco, food and drink giant Philip Morris, whose spend dropped 28% year-on-year from $480.6m to $346.9m. Procter & Gamble also reduced ad expenditure, albeit to a lesser degree, making cuts of 5.4% from $385.8m to $365.2m.
The figures underscore the problems currently facing media firms dependent on ad revenue. Their timing is particularly bad for TV networks, in the midst of the upfront ad selling season. The networks have been accused of charging prices that are too high given the current market – accusations that are hardly dismissed by CMR’s findings.
News source: Wall Street Journal