US: Paid search ad spend dips as big brands cut back


Both paid search and display advertising fell around 6% in the last quarter of 2011 in the US, as big advertisers tightened their belts. For the year, paid search dipped nearly 3% but display ads rose 5.5%, according to a new study. The findings, from research from Kantar Media, indicate that major US advertisers including Procter & Gamble, AT&T and General Motors significantly reduced their advertising spend last year.


Search ad spend fell 6.4% from the same period in 2010, led by pullbacks from the financial, insurance, and local sectors. Display spending dropped 5.9 percent as auto manufacturers, telecom providers, and travel companies tightened their belts.

The quarter was a tough one for advertising across the board, dropping by 1% from the same period a year ago. While the drop itself wasn't severe, it was the first quarterly decline since the end of 2009, representing a setback to what many had hoped was the start of a recovery.

For the year, ad spend rose by just 0.8% on an annual basis in 2011, reaching a total of $144bn overall.

TV remains top medium

By medium, television logged a 2.4% improvement, with the syndicated national segment up 15.4%, Spanish-language stations enjoying an 8.3% surge and cable seeing a 7.7% leap. Less favourably, network and spot TV endured 2% and 4.5% contractions in turn.


Looking online, paid search budgets shrank by 2.8% year on year while display yielded 5.5% growth, meaning the internet as a whole saw demand increase by just 0.4%.


Elsewhere, magazines logged a 0.4% slide, newspapers were off by 3.7% and radio posted a 0.6% decrease in ad sales. Outdoor, however, enjoyed a 6.5% leap, according to Kantar.

"The contrast of resilient TV spending and waning budget allocations to other traditional media was plainly evident at the end of 2011," Jon Swallen, SVP, research at Kantar Media Intelligence North America, said.

"Some mature digital media formats were also touched by the year-end tide of reduced spending. Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly towards emerging and unmeasured digital platforms bears watching as 2012 unfolds."

Advertisers cut back spend


Procter & Gamble, the FMCG group, reined in its outlay by 5.4% to $2.9bn, and AT&T, the telecoms specialist, was off by 11.7%, to $1.9bn. General Motors, the carmaker, trimmed its advertising support by 16.1% to $1.8bn.

Verizon, the media communications conglomerate, delivered an 11.8% reduction to $1.6bn. More positively, Comcast's adspend rose by 11.3% to $1.6bn. L'Oréal similarly committed $1.3bn to this area, an 18.1% increase.

Chrysler, the auto manufacturer, registered the biggest expansion in the top ten, rising 36.2% to $1.2bn. However, collectively the top ten advertisers knocked $452m off their ad expenditure, on just over $16bn.

Automotive top category for US ad spend

In category terms, the auto sector supplied $13.9bn in ad revenues in 2011, a 6.3% expansion on 2010. Retailers, excluding department stores, home furnishing and building supplies, provided a 4% rise to $10bn.

Further trends of note were that financial services improved by 3.6% to $9.1bn, whereas telecoms was down by 5.8% to $8.6bn and food and candy recorded a 4.4% depreciation to $6.4bn.


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