US Media Spend Falls in 08 Despite Olympics, Elections

04 November 2008

NEW YORK: Years with even numbering are traditionally good for the US advertising industry, thanks to recurring events like biennial elections. Not, however, 2008 which currently promises to be the first such year since 1970 to post a decline in broadcast TV spending.

The Campaign Media Analysis Group at TNS Media Intelligence reports that spending across the US media spectrum during the year to August 30 slipped 1.3%. If political spending is ignored, this percentage decline worsens to 1.6% – in dollar terms a shortfall of $331 million (€257.59m; £203.44m).

Meantime, Advertising Age calculates that if extra spending related to the Beijing Olympics is also removed from the equation, the total figure for the eight months would decline by 2.4% to $89.4 billion.

Worse yet, when political-spending data become available for September and October (months in which up to 80% of such spending occurs) AdAge predicts the crack in the dollar dam will widen into a full-scale breach.

Local broadcast TV is set to be the biggest loser. For this sector political spending is such a staple that operators measure their business in two-year cycles, the assumption being that odd-numbered years will be lean and even-numbered years fat.

2008 is set to buck that trend.

The Television Bureau of Advertising reports that  even with with the biennial boost, this year will probably see a decline for broadcast TV greater than the 1.5% drop recorded in the 1970s.

Says the Bureau's vp-marketing Jack Poor: "I've been somewhat disappointed in it because we haven't seen the growth rates that we traditionally see. You know: exponential growth from week to week. It's been steady growth, obviously, but it's been disappointing."

Moreover, other factors have come into play, reports John Hendricks, evp-sales for Tribune Broadcasting and Interactive: "The automotive industry, telecom and retail are three very big categories that have been softer than anticipated in 2008, really because of the downturn in the economy.

"In a typical year, when the underlying business is strong, you end up pre-empting some of your regular customers. This year, because the traditional business is not as strong, you're seeing less pre-emptions."

The outlook following the November 4 poll is cloudy at best, says  Clear Channel Radio president of sales Bob McCurdy: "I don't know initially if anything is going to replace the political dollars.

"The radio industry is really focusing on becoming a lot more creative in our solutions for addressing marketing needs.

"We're aggressively pursuing categories that hadn't used the medium before and going in with ideas that we believe will work to resolve those marketing issues."

Data sourced from; additional content by WARC staff