While this growth is impressive, seven countries still recorded declines in ad spending in the second quarter of 2009, including South Korea (-17%) and Taiwan (-16%).

“Although declines in advertising activity were still evident across free to air TV, newspapers and magazines in a number of markets, there were clear signs of a reversal of contracting activity.    In the more dynamic markets of China and India, both of which saw sharp cutbacks in advertising activity in the first quarter, advertising bounced back strongly with double digit growth over the same quarter in 2008,” said Richard Basil-Jones, Managing Director, Asia Pacific at Nielsen.  “Positive economic signs across the region suggest that the recovery to pre-financial crisis advertising activity may occur earlier than industry observers had forecast at the beginning of the year.”

On a year-to-year basis, ad spend was up 9 percent, reaching an estimated $112 billion (US).  Television was the only main media to record growth (10%), while newspapers and magazines showed modest declines (-1% and -3%, respectively).

Toward the end of 2008, the global downturn was adversely impacting advertising spending throughout many key markets around the world, with Europe and the Americas struggling more than others.  The exception to this was Asia Pacific (APAC), which appeared to be relatively impervious to the worst of the downturn. Beginning in late 2008, and escalating as the first quarter of 2009 unfolded, the majority of APAC markets were finally succumbing to declining economic conditions with substantial declines in advertising activity. Hand-in-hand with consumer confidence declining further in the new year, most APAC countries witnessed substantial ad spend cutbacks; although still not resembling the severity of those experienced in some other regions.

“While the flow on effect of the financial meltdown on individual countries’ advertising was beginning to bite across several markets late in 2008, it is the sobering results for the first quarter of 2009 which present a clearer picture of how advertising expenditure across the region was faltering. Main media measured across all markets, defined by Nielsen as free to air TV, newspapers and magazines, stalled at 0 percent growth compared to the first quarter of 2008. Even China, the juggernaut of advertising growth globally over recent years, was not immune to the faltering economic outlook, recording just 2 percent growth over the same period in 2008 and recording 17 percent growth in the fourth quarter of 2008,” said Richard Basil-Jones, Managing Director for Asia Pacific, Nielsen Media International.

“Although six markets recorded declines in the fourth quarter of 2008, overall growth was 10%; however, with nine countries now in decline in 2009, the zero growth in ad spending was not unexpected. On a slightly more positive note, all “other media” tracked by Nielsen across various countries (radio, outdoor, pay TV, cinema and other combined) posted an overall 1.3 percent increase in Q1 2009,” he added.

 Nine countries recorded declines in Q1 ‘09 ad spend versus Q1 ‘08:

• Thailand        -1% 
• Malaysia        -3%
• New Zealand  -4%
• India             -6%
• Australia        -11%
• Singapore      -14%
• South Korea   -19%
• Taiwan          -22%
• Hong Kong     -5%

Just three countries showed growth in Q1 ‘09 ad spend versus Q1 ‘08:

• Indonesia (20%)
• China (2%)
• Philippines (8%)

Other key findings:

•  Across the twelve markets monitored, a total of US$23.5 billion was spent on advertising in Q1 ‘09
• A total of US$109.16 billion was spent on “Main Media” advertising in the 12 months to March ‘09 (+9%) YOY, with television comprising 71 percent of expenditures.
• FTA Television ad spending grew 9 percent YOY; with six countries posting double-digit growth as four countries recorded declines.
• Newspaper ad spending recorded a modest 2 percent growth YOY, even though the medium experienced declines in six countries.
• Magazine ad spending, despite declines in 7 countries, increased 2 percent YOY, with high double digit growth in 4 countries.
• Radio dominated the “all other media” tracked by Nielsen, with a 51 percent share of spend and a 5 percent increase YOY.

“The effects of the global financial crisis have certainly caught up with the ad sector in this latest quarter, especially in North America and Europe where virtually all of the territories we reported on recorded negative growth,” said Ben van der Werf, managing director, Global AdView at Nielsen.  “Even China, which usually sees a boost in ad spend during the Chinese New Year, posted subdued growth for the quarter.”

All four major media types – newspapers, magazines, TV and radio – posted drops in ad spending, with print media leading the decline.  Magazines fared the worst (-17.4%) followed by newspapers (-9.1%).   In North America, magazine ad spend was down 22.2 percent, while newspapers were off 15.6 percent.

Not surprisingly, the automotive category recorded the largest loss in ad spend – down 19.9 percent – followed by financial services (-16.7%) and clothing (-15.7%).

Read the full Global Ad Spend press release.

Quarter-over-Quarter Growth in Online Display Ad Spend by U.S. Consumer Goods Industry

“While direct response advertising has been very successful on the Internet, with categories like finance and travel devoting a significant portion of their budget to online advertising, on-line advertising will not continue to grow as rapidly without major brands beginning to devote larger portions of their ad budgets to the Web.  We are seeing some of that happen now with Consumer Packaged Goods companies, which are growing their budgets despite a down economy,” said David Wiesenfeld, vice president, online marketing solutions at Nielsen.

YouTube was the top entertainment web site for consumer product companies in 2009, with 637.7 million display ad impressions and a 24 percent share of all advertising in the genre.  AOL.com and Oprah.com rounded out the top three.  YouTube was also the fastest growing site among the top 10, increasing 572 percent year-over-year.

Read the full release regarding consumer product online display ads here.

INDONESIA

Leading the group was Indonesia, where ad spending increased 19 percent in 2008 over the previous year, and all four quarter showed growth.

The top 10 ad spending categories combined represent 77 percent of all main media spending in Indonesia.  The office equipment/computers/communications category led spending in value terms and posted 53 percent growth on a year-to-year basis.   Medicines/pharmaceuticals and toiletries & cosmetics were laggards in the top 10, posting no growth in ad spend for the year. As in other Asian countries, telecom brands dominated the top 10 advertisers, with Excelcomindo – GSM Card leading the way.

MALAYSIA

Malaysia came in second, with ad spending up 12 percent for the year. The fourth quarter did experience a slow-down, with increases at just 2.4 percent versus the same period a year earlier.

All ten of the top ad spend categories – -which account for 64 percent of all Malaysia media activity – registered gains. Retail, the top category by value, recorded 24 percent growth, while pharmaceuticals posted 32 percent growth.  Financial ads posted the lowest growth of the top ten, eking out just a 2 percent increase.  The three largest advertisers, which represented 57 percent of the total top 10 activity, were telecoms, led by Celcom.

PHILIPPINES

Coming in third was the Philippines, which posted 11 percent growth across all media.  Ad spending remained solid over the year, showing a slight slow-down in the fourth quarter.

The top ten categories represent almost half of all main media advertising, and is led in value terms by hair shampoos/hairdressing products.  That category, however, showed a decline of 7 percent in ad spending compared to 2007.  The biggest growth – 61 percent – came in the proprietary drugs/other than vitamins and tonics category.  Of the top ten brands advertised in 2008, five were hair care and two were dental hygiene products, with Colgate Maximum Cavity Protection toothpaste leading the way.

SINGAPORE

Moving west to Singapore, ad spending finished 2008 with 7 percent growth, although spending actually declined in the fourth quarter after three previous quarters of consistent growth.

Entertainment, the top category in value terms, showed 18 percent growth for the year. Education showed the most improvement – 21 percent – while retail was the only declining category in the top ten (-1%).  The leading advertiser was Courts, a retailer, followed by Tiger Beer/Asia Pacific Breweries.

THAILAND

The only country in Southeast Asia to show a decline in ad spending in 2008 was Thailand, which was affected by the slowing economy and civil unrest.  Ad spending was down 3 percent compared to 2007.  Only the second quarter showed any growth, a relatively modest 4.6 percent.

Only two categories of the top ten showed any growth – motor vehicles and non-alcoholic beverages.  The top category in total spent was skin-care preparations, which recorded a 6 percent decline on a year-to-year basis.  Skin care, autos and communications products dominated the top ten brands advertised in the year, with Ponds Facial Skincare Product leading followed by PTT Public Co., a gas company and Toyota pickups.

Ad spending in the largest category – financing, insurance & securities – not surprisingly dropped 13 percent in 2008, while construction & real estate saw a 28 percent decline.  Only three categories posted gains on a year-to-year basis: transportation equipment (27%), household goods (4%) and food (2%).

Telecommunications services were the three leading advertisers with KTF Show leading the way followed closely by Samsung Digital Anycall and Sk Telecom.  Unlike the other two companies, however, KTF Show drastically pared back spending in the fourth quarter, while Samsung Digital and Sk Telecom were more consistent over the course of the year.

No one category showed negative growth over the course of the year, although in the fourth quarter auto and telecom/Internet service providers did decline (-7% and -14%, respectively).  The top three categories for ad spend growth for the full year were education (52%), telecom/Internet service providers (39%) and retail (33%).  Telecommunications companies dominated advertisers, with Airtel Cellular Phone Service leading the pack with Reliance Mobile and Tata Sky bringing up the top three.

The top 10 advertising categories account for almost 80 percent of total ad spending, with the largest category, pharmaceuticals and health products, increasing 2 percent.  Categories showing the strongest growth were business/industrial/agriculture (50%), clothing & accessories (45%) and foods (32%).  No category showed a decline, although telecommunications recorded no growth on a year-to-year basis.

The top 10 products advertised represented 9.3 percent of all main media ad spending in 2008.  Olay was the top advertiser, with a spend 43 percent higher than the next largest spender, KFC.

Hong Kong also showed solid growth in ad spend in 2008, up 10 percent from 2007, although growth came to almost a standstill in the fourth quarter as the economic downturn took hold.  Newspapers still accounted for the highest share of ad spending – 34 percent – followed by TV at 30 percent.  Meanwhile, radio enjoyed the highest growth, up 54 percent from the previous year, though it still accounted for just 5 percent of ad spending.

The leading category of advertiser in terms of spend was retail, which recorded an 11 percent increase for the year.  Toiletries showed the most impressive growth at 20 percent, while property posted the largest decline at -16 percent.    The lead advertiser in 2008 was Bit Sau Jim Beauty Centre – Slimming, finishing the year 30 percent ahead of second-ranked Park N Shop.

Meanwhile, the advertising environment in Taiwan was a bit gloomier, recording a 7 percent decrease in spending on a year-to-year basis and the second largest decline of the 12 countries Nielsen measures.  The first half of the year saw no growth, while the second half recorded quarterly declines (-6.8% in Q3 and -16.9% in Q4).

The top ad category in spending terms was architecture, which posted a 17 percent decline for the year.  Only two categories recorded growth: foodstuffs (6%) and computers & accessories (5%). The leading advertiser was Tsann Kuen Trans-Nation Group, a consumer electronics retailer, followed by Elife Mall.

In Australia, estimated ad spend in main media for the year was up 2 percent over 2007.  Year on year comparisons saw the first two quarters of the year posted growth of 14 percent and 5.5 percent, but by the third quarter, spending declined 0.5 percent while the fourth quarter saw a decline of 3.5 percent.

Retail remained the largest advertising category in Australia, accounting for more than 20 percent share of spending and posting solid 5 percent growth over the previous year.  Motor vehicles (+4%), and entertainment and leisure (+2%) rounded out the top three.  The travel and accommodation category posted 13 percent growth for the year, while media posted 6 percent growth.  Not surprisingly, decliners were led by recruitment (-6%) and finance (-5%).

The top 10 product advertisers in 2008 were dominated by 8 retailers and 2 telecommunications firms, marking no change from 2007.  The top two product advertisers substantially increased their ad spends in 2008: Harvey Norman Discount Stores (+26%) and Woolworths Supermarkets (+43%).

In New Zealand, after posting modest growth the first three quarters of the year, the fourth quarter marked the first signs of the impact of the global downturn in New Zealand.  On a quarterly basis, ad spend increased 3.4 percent, 2.7 percent and 1.1 percent in the first three quarters, only to drop by 3.2 percent in the fourth, resulting in an annual growth in ad spend of just 1 percent for 2008.

The top ad spend category was leisure and entertainment, which posted 6 percent growth for the year.  Two categories showed solid double digit growth in 2008: government departments, services and community (+12%) and travel (+10%).  Meanwhile ad spending for investment, finance and banking declined by 14 percent.

Retail outlets dominated ad spending, with The Warehouse, a major discount department store chain, Harvey Norman and New World Supermarkets comprising the top three advertisers over the course of the year.

Perhaps the biggest challenge facing advertisers and web sites is the plethora of sites competing for scarce advertising dollars with little to offer in the way of differentiation.  Unfortunately, no single formula or strategy has emerged to guide advertisers looking to build brand loyalty, share of mind or unit sales when it comes to the online world.

Regardless, online media continues to have a tremendous amount of unrealized potential.  Roughly 57 percent of Fortune 1,000 companies advertised online in at least half the quarters from the past three years.  But the way they have been doing so points to a scatter-shot approach: 20 percent of Fortune 1,000 companies are distributing ad dollars across 32 or more web sites, while another 20 percent are hitting 8-31 outlets.

A number of companies are finding success: ConAgra, Exxon Mobil, Clorox, Cisco Systems, Foot Locker and Barnes & Noble each bought millions of online impressions in the fourth quarter of 2008, and got the most bang for their buck by concentrating more than 90 percent of their digital dollars on a single web site.  On the web site front, ESPN.com recently overhauled their entire site, moving easy-to-use streaming video and advertising to the forefront. The results have been impressive: 45 seconds per page, an audience of 19.5 million visitors and 29 percent of advertising utilizing non-standard formats.

Learn how to deploy effective online advertising strategies, including Nielsen’s four-point plan, in the current issue of Consumer Insight.