expenditures for fourth-quarter 2007 fell
by 0.1 percent compared to 2006.
In the report, Jon Swallen, senior vice
president of research said: “The ad market remains stalled and is being engulfed
by the spreading pessimism about general
economic conditions. Fourth-quarter
performance was indicative of this malaise and early figures from 2008 suggest
the growth rate for measured ad spending
has not appreciably changed.”
Brian Fays at MTVN has definitely
felt the pushback from clients. “It’s a
challenging marketplace,” he says. “The
recession is starting to affect advertising
budgets.”
The good news: among all channels
and spending categories, the largest per-
centage gain was in direct response, up
17 percent to $7.48 billion. Next was Internet display advertising, up 16 percent
to more than $11.3 billion. Consumer
magazines saw a 7-percent gain, which
pushed spending up to $24.4 billion, and
cable TV followed close behind with a
6.5-percent increase and $15.6 billion in
total spending. Lastly, outdoor advertising went up about 5 percent to hit just
more than $4 billion.
The largest advertiser of the year,
Procter & Gamble, which owns a variety
of DR brands, was up 5. 6 percent, with
total spending around $3.5 billion.
If the media buying industry is reflecting signs of a recession, Cardinal’s clients
haven’t felt any ripple effects. “This will
be my second big recession since I’ve
been in business,” she says. “I’ve always
been dubious because when people aren’t
outside spending, they’re at home watching TV and spending.”
Even if a recession is eminent, the
clients that she works with, including
big-ticket products such as Total Gym,
are savvy and well prepared. From a
budgeting standpoint, she says they’re
already ahead of the curve.
Media buyers are also getting a
helpful nudge from the aftereffects of
the writers’ strike that occurred at the
end of 2007, according to Advertising
Age. A TargetCast analysis showed
that the average cost of prime-time
spots on network TV in the first quarter dropped 12 percent to $125,634.
The average cost of a commercial
unit on ABC, CBS and Fox dropped
somewhere between 9 and 12 percent.
NBC’s cost plummeted nearly 25 percent. Since ratings dipped so low, the
networks reserved a sizable amount of
inventory to satisfy audience guarantees with their clients.
Consequently, it pushed CPMs so
high that advertisers went elsewhere
leaving available inventory and relatively cheap unit costs. Steven Farella,
CEO of TargetCast, predicts that May
will be the sweet spot for advertisers to
reap these benefits. ■
