Traditional Ad Spending is declining in 2014

With the highly fragmented world of marketing it is becoming more and more competitive to find those places where your marketing spend has the biggest impact and best ROI for the dollars spent.   But, your dollars are also being spread widely, and it has a negative impact on traditional ad spending as most marketers experiment with new marketing strategies which can cost thousands of dollars to implement.  That is one of the primary reasons that every company needs to understand the new technologies as they come into play, and how they are used by their own consumers.   Failure to do so will not get you the ROI that you hope, and will in fact then take away from those strategies that return a higher ROI.   You need to understand clearly how to build an affective strategy that reaches out and actually activates a behavior from your audience.   You need to know their expectations so you can build the train that they want to ride.   So look at the research but do so in a more open manner as there often is more to the story than just an old industry lagging behind.  Often it is our inability to focus in on the proper strategies that work, and we follow the trends to quickly without understanding what results we need to receive before we follow this new path. 


Four Of Top Five Advertisers Cut Traditional Ad Spending in First Half — Kantar

The Wall Street Journal

September 16, 2014, 12:01 AM ET

Four of the nation’s five biggest marketers cut their  traditional media and online display ad spending in the first half of the year, according to new data from Kantar Media.

According to data from Kantar Media, Procter & Gamble reduced its ad spending on traditional media and display by 17% in the first half of the year. (AP Photo/Al Behrman, File)

Among those cutting spending was Procter & Gamble, the U.S.’s biggest advertiser, which reduced its ad spending in traditional media and display by 17% to $1.32 billion in the first half, compared with the year earlier period, according to Kantar Media.

P&G cut its ad spending by 2.6% in the first quarter and slashed its ad expenditures by nearly a third in the latest quarter, which also marks the end of P&G’s fiscal year, Kantar Media said. However, P&G had an atypically high volume of ad spending in the year-ago second quarter, Kantar Media noted.

Also cutting their spending was AT&T, Comcast Corp and L’Oreal, the report said. AT&T, the third largest advertiser in the U.S. , spent 9.4% less on advertising this year through June, bringing its marketing spending for traditional media and online display for the period to $917.6 million.

The data doesn’t suggest the advertisers have cut spending in total. WPP-owned Kantar doesn’t track online ad spending other than in display, which means its figures exclude paid search, Web video and other new digital categories. That leaves open the possibility that the marketers moved ad spending into digital categories not tracked by Kantar, out of traditional categories.

P&G’s Chief Executive A.G. Lafley said last month that the company has improved its marketing efforts through an optimized media mix that has a greater digital, mobile, search and social presence.

Those four big marketers weren’t typical. According to the report, the top 100 marketers — which make up nearly 45% of the ad market–  together increased ad expenditures by 2.9% for the first half of the year.

Kantar’s report also highlighted how much of an impact the Olympic Games in the first quarter had in depressing second quarter ad spending. It found that Olympic advertisers cut ad spending in the second quarter by more than 4% year-over-year, while non-Olympics advertisers — which Kantar Media notes are more indicative of the core ad market at the mid-year point —  increased their ad spending 2% in the latest period.

The result was that second quarter spending on media measured by Kantar came almost to a standstill in terms of growth. Overall total ad expenditures in the U.S. were up just 0.7% to $35.6 billion in the second quarter, Kantar reported, compared with the 5.7% growth seen in the first quarter.

Second quarter earnings reports from advertisers in July and August had painted a picture of a weak national ad market. The Kantar data showed just how much the Olympics-boosted first quarter was the reason.

“Olympic advertisers are heavy dollar volume advertisers,” said Kantar Media North America Chief Research Officer Jon Swallen, adding that the slowdown in ad spending suggests that those large advertisers pulled budgets from the second quarter into the first quarter to fund Olympic expenditures.

“Growth is floating within a fairly narrow range, once you subtract those one-time timing effects,” Mr. Swallen said of the ad market.

Several of the top advertisers cutting spending in the first half had a significant position in Olympic advertising, including P&G, AT&T and Comcast.

One big advertiser boosting spending was General Motors, the nation’s second biggest spender on marketing, which increased its ad spending 23% to $928.8 million in the first half of the year. The automaker has been shifting more marketing dollars from passenger cars towards SUVs and pickup trucks and also had a comparatively soft year-ago second quarter in terms of ad spending, Kantar Media pointed out.

 By media type, television advertising revenue rose 5% in the second quarter, though cable and network TV had distinctly different patterns. Cable TV ad spending rose 9.3% in the quarter from a year earlier, with a third of that gain attributable to the World Cup and the semi-final games of the NCAA Men’s Basketball Tournament that aired on cable for the first time. Spanish language TV spending jumped 42%, also boosted by the World Cup. Network TV ad spending, meanwhile, slipped 7.2%, hurt by fewer March Madness and NBA playoff games compared to last year.  Spot TV buys edged down 0.5% as a pullback in spending from automotive and telecom advertisers offset higher political spending.  For the first six months of the year, TV ad spending is up 7.3%.

Internet display spending jumped 6.2% in the second quarter and is up 9.7% for the first half of the year.

Spending for print media ads continued to contract in the latest period. Newspaper advertising was down 10% for the second quarter and down 7.7% for the first half of the year. Magazine media posted a 5.7% ad spending decline for the quarter and a 3.9% decline for the first six months of the year.

Radio advertising, meanwhile, decreased 3.6% in the second quarter and is down 3% for the first half of the year. Ad expenditures for outdoor media  slipped 1.6% for the second quarter, but the category is up 0.4% for the first six months of the year.

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1 Comments to “Traditional Ad Spending is declining in 2014”

  1. Fiona Connet says:

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