US Adspend Shows Unexpected Monthly Dip

23 August 2006

NEW YORK: US advertising spend, basking in unbroken sunshine for four years, suddenly encountered an unwelcome cloud on the horizon in the shape of May's numbers.

Latest figures from TNS Media Intelligence have rained on the industry's parade by revealing monthly measured adspend down 0.3% compared with the year-earlier period.

This apparently small dip echoes the almost imperceptible decline in adspend that happened in December 2000. It turned out to be the precursor to a recessionary cloudburst that lasted two years.

May's figures show adspend at $12.7 billion (€9.88bn; £6.71bn), brought down by a revenue fall in network TV (-2.8%) and a sharp drop in local newspapers (-9.1%).

The month's bright spots included internet advertising, which rose 18.6%; while Spanish-language TV networks rose 17%. Overall, measured adspend between January and May 2006 increased 3.9%.

The May numbers, however, track a slump in last quarter's GDP, down to 2.5% from 5.6% in Q1 - also a 0.7% fall in US media employment in May compared with the same month last year.

Some in the industry will draw comfort, nevertheless, from data that show employment in the overall US ad industry rose in June to 1.59 million, the highest level since December 2002.

But the message is loud and clear: watch the skies.

Data sourced from AdAge (USA); additional content by WARC staff