NEW YORK: According to TNS Media Intelligence, financial services is the US ad industry's third-largest category (after autos and retail). But in the wake of the worsening credit crisis, there's been increasing pain and zero gain for Madison Avenue.
Following double-digit adspend growth during the first three quarters of 2007, expansion has dropped to nil in the year to date, TNS says.
As the former Masters of the Universe bite dirt, felled by their own greed and arrogance, the malaise has metastasized across the global economy, weighing heavily on media stocks – already reeling from the incursion of digital marketing.
Moreover, ad categories one and two - auto and retail - are also staggering as consumers tighten their purse-strings.
Says Jon Swallen, svp of research at TNS: "We're talking about people's money here. The state of financial services impacts consumer confidence and the overall psychology of the economy, so the largest advertising budgets are threatened by the events of the last month."
Bankrupt American International Group has cancelled its advertising commitments, as has fellow-insolvent Lehman Brothers – both of which survived by the skin of their teeth after eleventh-hour bail-outs, respectively by the US taxpayer and intrepid Brit bank, Barclays.
Even the relatively stable Merrill Lynch is poised to drop into a lower adspend gear, according to David Deacon, vp of brand management for Merrill's global markets and investment banking group.
"Up until now, there hasn't been any change or hitch in our advertising and marketing program. We're not sure what the plan is for the next several months. We're assessing that now."
Data sourced from Wall Street Journal Online; additional content by WARC staff