NEW YORK: The feared slowdown in US advertising expenditure has begun to bite according to the latest report released Tuesday by TNS Media Intelligence.
Precipitated by cutbacks in spend by the big auto manufacturers, broadcasters and newspaper groups are begining to feel the icy breath of recession on their necks.
Warns TNS' svp for research Jon Swallen: "The ad market remains stalled and is being engulfed by the spreading pessimism about general economic conditions."
Swallen's pessimism is driven by the 2007 adspend numbers for brands across twenty media categories. "Early figures from 2008 suggest the growth rate for measured spending has not appreciably changed,” he says.
According to TNS, a fall in adspend of 0.1% during last year's final quarter depressed spending growth for 2007 as a whole, rising by a meager 0.2% to $149 billion (€95.54bn; £74.51bn).
This compares with growth of 4.1% in 2006 and an earlier forecast by TNS of 2.6% growth for 2007.
For the year ahead, agencies and media alike are pinning their hopes on an ad dollar boost from the Beijing Olympics and the US presidential election.
Exacerbated by turbulence in the housing and financial markets, marketers' concerns about consumer spending and corporate profits resulted in a 1.7% decline in TV adspend. Radio ad revenues fell 3.5% and newspapers 5.6%. Moreover, the deceleration worsened in the fourth quarter.
The faint silver lining around the economic clouds was illumined by a 15.9% rise in internet display advertising, which in 2007 accounted for 7.6% of all US adspend. But even online's growth is slowing. In 2006 it notched 17.3%.
Consumer magazines also bucked the southbound trend, up 7% across 2007.
TNS also notes that the bear trend is at its most evident among the nation's largest advertisers – the one hundred highest spenders – who collectively slashed their advertising outlay by 2.6% to $63.4bn.
Data sourced from Financial Times; additional content by WARC staff