Global ad spending shows signs of growth – Nielsen

As global ad spending continues a steady climb to recovery in the first half of 2010, advertising in the world’s largest market is also seeing signs of growth, with a 3.8 per cent increase in US ad spending year-over-year, according to figures released this week by The Nielsen Company.

The US market, which faced six straight quarters of declines in ad spending, has seen a turnaround in 2010. In total, advertisers spent an estimated $54 billion during the first half of 2010. The increase in US advertising reflects a modest improvement in US consumer confidence in the first half of the year, as advertisers look to highlight value deals and increase promotions in the hopes of spurring consumer spending.

However, with confidence still well below pre-recessionary levels, automotive was one of only a few bright spots in the top 10 product category ad spending.

Overall, there was a three percent increase in the top 10 product categories, with the largest growth by far seen in automotive (+27%) and auto insurance (+23%). The automotive advertising was driven largely by increased spending by General Motors which was up 73% over 1H09.

Ford and Toyota also grew their ad spending by 15% and 22% respectively. An increase of 82% for UAW Health Care Trust contributed to the first half growth in the auto insurance category. All other categories, except department stores (+5%) and restaurants (+2%) showed declines in the first six months of the year.

“Not surprisingly, auto ad spending is closely tied to auto sales given that those sales dollars enable increased marketing expenditures,” said Sallie Hirsch, SVP of Research for Nielsen’s automotive unit.

“Last year was abysmal for the auto industry as economic factors drove down sales to very low levels. Now that we’re seeing an improvement in the market and consumers are more willing to open their wallets, car sales have started to rebound and that’s what’s driving the increase in ad spending for 2010.”

Looking at ad spending across media types, US television (network, cable, syndication, spot, Spanish Language network and Spanish Language cable) continues to dominate, accounting for $33.8 billion in advertising during the 1H10, a six per cent increase over last year. Spanish language network TV and Cable TV in particular saw the biggest gains, up 24 per cent and 13 per cent respectively over 1H09.

Print media overall (national and local magazines, newspapers, Sunday supplements and B2B) was flat, however, national Sunday supplements received a significant uptick with 20.5 percent growth over last year. National magazines were also up 7.4 per cent. Alternatively, local Sunday supplements and national newspapers declined 7.9 per cent and 6.9 per cent respectively.