US Adspending Stagnant Thru' Jan-Sep 2007, Reports TNS

13 December 2007

NEW YORK: Flying in the face of media seers' prognostications, US adspending during the first nine months of 2007 remained all but static in growth terms - recording a year-on-year uptick of just 0.2%, according to TNS Media.

It is of course possible (if improbable) that the final quarter will see a surge that lifts spend to the growth levels forecast last December by adland savants Robert J Coen of Universal McCann (+4.8%) and ZenithOptimedia's Steve King (+4.2%).

But why has growth apparently juddered to a halt?

It can hardly be attributed to the subprime debacle and the ensuing credit crunch - both of which were no more than faint clouds on the horizon during the year's first half.

TNSM attributes the stagnation to a number of factors, from a dive in corporate profits to decelerating retail sales and housing woes. As at September 30, the national adspend total registered just $108.2 billion (€73.6bn; £53.07bn) .

Comments TNSM svp of research Jon Swallen: "All of these [foregoing factors] collectively creates an environment where many marketers feel the need to exercise restraint and hold back on advertising and marketing."

He takes no comfort from the fact that spending rose 1.3% in Q3, reversing declines in the first half of the year. "This is far from indicating we're on the road to happy, rosy times," he said.

As to prospects for 2008, he doesn't share the optimism displayed by Coen and King. Olympic and political spending aside, Swallen expects next year to be no cheerier.

"I don't think that core fundamentals are going to drastically change over the next six months," he said. "I'm not convinced we're out of the woods yet, and there may even be a few more boogeymen out there waiting to rear their heads."

During the nine-month period, the usual suspects topped the spending league led, as ever, by Procter & Gamble, up 1.3% at $2.47bn. AT&T, Verizon and General Motors respectively occupied second, third and fourth places.

Data sourced from Reuters; additional content by WARC staff