Advertising spending increased by more than 3 percent through the first half of 2011 compared with the previous year, but was not expected to sustain those gains, according to New York City analysis firm Kantar Media.
Revenue in advertising was fueled largely by a 10.4 percent increase in Internet advertising expenditures during the first six months of 2011 compared with the first half of 2010, national data compiled by Kantar Media showed.
Predictably, a 0.3 percent drop in spending on newspaper advertisements held back net gains in the advertising sector. Other notable areas included a 1.8 percent increase in television advertising expenditures, a 2.9 percent increase on magazine ad expenditures and a 1.4 percent increase on radio ad expenditures.
While the company has yet to release its third quarter analysis of national advertising, Jon Swallen, senior vice president of research for Kantar Media, said that the growth witnessed over the first half of the year had abated somewhat.
“First and foremost, over the course of the year the year-over-year growth rate in advertising spending has been slowing down,” Swallen said, attributing the spending drop to a variety of economic factors.
Earlier in 2011, Swallen said that significant decreases in ad spending by Japanese companies in the aftermath of the tsunami ”“ including Toyota Motor Corp. and Honda Motor Co. ”“ contributed “heavily” to what were at the time lower-than-expected revenues in the advertising industry.
Since then, the continued global economic uncertainty has weighed heavily on businesses, Swallen said.
“As we”™ve gotten deeper into the year and as the economic picture has remained murky, advertisers have begin to take a more cautious approach and pull back on some of their advertising spending,” he said. When asked what is needed to stimulate ad spending, he responded, “sustained GDP growth.”
So far for advertisers, 2011 has represented a continuation of many trends that have been developing for several years, including the expansion of digital advertising and the resurgence of national television ad spending, the Kantar Media analysis noted.
“Number one, the migration of ad dollars toward digital media (has grown), whether it”™s online display advertising or online search advertising. Number two, among all the traditional non-digital media, television media has far and away performed better than their competitors. Number three, the lagging sector has been print advertising, most notably newspapers,” Swallen said.
Advertisers and media companies are eagerly awaiting 2012, which they hope will bring the “quadrennial” stimulus that typically results every four years when the Summer Olympics coincide with national elections.
Swallen said that those two events alone are responsible for adding about 1 percentage point to the total growth rate of the advertising industry, which leaves little doubt as to why they are so widely anticipated by advertisers and media.
“It”™s quite remarkable ”¦ even though these two events are relatively concentrated, the impact when applied across the entire advertising industry is quite significant,” he said. “Typically every four years those two together artificially boost up advertising spending. It”™s a stimulus but it”™s a short-term stimulus.”
