Big advertisers cut back in US

13 March 2012

NEW YORK: Major US advertisers including Procter & Gamble, AT&T and General Motors significantly reduced their advertising spend last year, new figures show.

Kantar Media, the research firm, reported that expenditure levels rose by 0.8% on an annual basis in 2011, reaching a total of $144bn overall.

Procter & Gamble, the FMCG group, reined in its outlay by 5.4% to $2.9bn, and AT&T, the telecoms specialist, was off by 11.7%, to $1.9bn. General Motors, the carmaker, trimmed its advertising support by 16.1% to $1.8bn.

Verizon, the media communications conglomerate, delivered an 11.8% reduction to $1.6bn. More positively, Comcast's adspend rose by 11.3% to $1.6bn. L'Oréal similarly committed $1.3bn to this area, an 18.1% increase.

Chrysler, the auto manufacturer, registered the biggest expansion in the top ten, rising 36.2% to $1.2bn. However, collectively the top ten advertisers knocked $452m off their ad expenditure, on just over $16bn.

By medium, television logged a 2.4% improvement, with the syndicated national segment up 15.4%, Spanish-language stations enjoying an 8.3% surge and cable seeing a 7.7% leap. Less favourably, network and spot TV endured 2% and 4.5% contractions in turn.

Looking online, paid search budgets shrank by 2.8% year on year while display yielded 5.5% growth, meaning the internet as a whole saw demand increase by just 0.4%.

Elsewhere, magazines logged a 0.4% slide, newspapers were off by 3.7% and radio posted a 0.6% decrease in ad sales. Outdoor, however, enjoyed a 6.5% leap, according to Kantar.

"The contrast of resilient TV spending and waning budget allocations to other traditional media was plainly evident at the end of 2011," Jon Swallen, SVP, research at Kantar Media Intelligence North America, said.

"Some mature digital media formats were also touched by the year-end tide of reduced spending. Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly towards emerging and unmeasured digital platforms bears watching as 2012 unfolds."

In category terms, the auto sector supplied $13.9bn in ad revenues in 2011, a 6.3% expansion on 2010. Retailers, excluding department stores, home furnishing and building supplies, provided a 4% rise to $10bn.

Further trends of note were that financial services improved by 3.6% to $9.1bn, whereas telecoms was down by 5.8% to $8.6bn and food and candy recorded a 4.4% depreciation to $6.4bn.

Data sourced from Kantar Media; additional content by Warc staff