Marketers to Slow Their Spending on Traditional Media

Media companies may be holding their breath about the future. After the ad market came roaring back in Q4 2010, the growth rate steadily dropped throughout 2011. In Q4 2011, the ad spending growth rate fell into negative territory. While 2012 is expected to be a good year because of the Olympics and the elections, there is concern about the future.

Kantar Media Intelligence reports the 0.8% growth in 2011 total advertising spending brought the market to a $144.0 billion level. By individual media formats, the changes in spending last year looked like this:

  •  TV Media +2.4%
  • Internet Media +0.4%
  • Magazine Media ‑0.4%
  • Newspaper Media ‑3.7%
  • Radio Media ‑0.6%
  • Outdoor +6.5%

A close look at some of these figures can help media professionals anticipate what might be coming for 2012. It’s interesting to see that the paid search portion of Internet Media actually dropped 2.8% in 2011. This decrease was offset by a spending increase of 5.5% in display ads. Analysts say part of the drop in search is linked to fourth quarter reductions in the financial, insurance and local service sectors.

And the drop in both national and local newspapers was particularly noticeable as advertisers shifted their spending to digital channels to connect with holiday shoppers, especially in November and December.

Analysts also noted that several large marketers such as Procter & Gamble, AT&T, and General Motors all cut their ad budgets recently. But there may be a broader pattern at work. Jon Swallen, SVP Research at Kantar Media Intelligence North America, commented on the steep drop in traditional spending during Q4 2011. “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.”

By sector, the biggest spending increases have been coming from auto dealers and local services. These are the targets accounts that media reps will likely be going after in 2012. Each sale may become increasingly important as less ad money is made available for traditional media.

[Source: Kantar Media Reports U.S. Ad Expenditures. Kantarmadiana​.com. 12 Mar. 2012. Web. 20 Mar. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.