Few industries have suffered more than auto manufacturing in the Great Recession of 2009. As a consequence of accepting bailouts from the federal government, Chrysler and GM sharply curtailed their ad budgets this year. Chrysler, in particular, is ready to re- introduce itself as a vigorous company with products targeting consumers who are looking for something new from American manufacturers. To generate interest, the company plans to significantly ratchet up ad spending between and 2011.
One way to get a read on the intent of money managers in the slowly improving economy is to watch the private equity industry. Executives in the private equity industry invest funds in traditional firms and may also take struggling public companies private in order to streamline business operations. Like many other industries, the private equity sector suffered during the recession. A new study from BDO Seidman, LLP indicates that over half of private equity companies report poor performance by about 20% of their portfolio through the 3rd quarter of 2009.
Technology firms, perhaps sensing an end to the recession, are beginning to increase ad spending. Many of these companies have new products and services to tout. And a recent Wall Street Journal article notes that the increase in advertising is designed to win new customers in a tough market.
By the time 2009 ends, spending on direct mail marketing will total $43.7 billion. That dollar amount marks a 16.8% decline from 2008 levels and the third year of steady drops in the industry. The good news is that direct mail spending should stabilize and remain at $43.7 billion in 2010.
Consumers across the U.S. continue to support live entertainment events despite the recession. This is great news for producers of opera, symphony and theater groups. But these marketers must continue to advertise their offerings to stay top of mind with their core audience. Increasingly, this may mean using online media.
According to a recent Media Audit release, the media use statistic for live arts events patrons are as follows:
Heavy Internet users (3+ hours daily): 41.9%
Heavy Outdoor users (drive 200+ miles a week): 37.5%
Heavy Radio users (3+ hours daily): 21%
In general, about 3 out of 10 U.S. consumers attends at least one live arts performance annually. The audience demographics are typically more female (55.7%) than male (44.3%). And some U.S. markets enjoy higher attendance rates at these events. The Media Audit reports the following top five markets.
Ann Arbor, MI 40.6%
Hartford, CT 38.1%
Long Island, NY 38%
Washington, D.C. 37.6%
New York City, NY 35.7%
As producers of this year’s Christmas concerts and ballets consider where to advertise their events, it seems a safe bet that many will allocate a significant portion of the budget to online media outlets.
[Source: FYI Newsletter, The Media Audit, October 2009]
Along with the rest of the online ad market, the local sector has enjoyed rapid growth during the past five years. And in 2009, Borrell Associates predicts a 12% increase for local online advertising. But after this year, Borrell analysts expect the growth rate to slow significantly. The company also foresees online formats taking a larger share of local ad budgets. Marketers, currently allocating 13.8% of local ad budgets to online formats, will increase the percentage to 16% by 2013.
Marketing by pharmaceutical companies dropped significantly in the first half of 2009. TNS Media Intelligence reports the overall drop was 7.8% while Nielsen says the drop was as much as 11.3% compared to the same period last year. This follows a 9% drop from $4.8 billion in 2007 to $4.4 billion in 2008.
Internet advertising in the United States should decline at a slower rate in the months ahead with "real growth" not expected again until mid-2010, according to IDC's yet-to-be-released Worldwide and U.S. Internet Ad Spend Report 2Q09.