The overall outcome of 2009 advertising is the result of totally different behaviors within the regions. Asia Pacific inverted the downturn quite early in the year and, since quarter two, has been the only region to show growth compared to 2008 (+6.6%). Europe, which is still below the levels of the previous year (-4.9%), showed improvement in the second half of the year and moved to the positive side of the scale in the last quarter of the year. North America shows the largest percentage decline versus the previous year (-9.4%) and, though the percentage decrease is more contained in the last quarter, the level of expenditure has not matched that of 2008 yet.

The declines reported quarter after quarter however, were gradually more contained, with the second half of the year giving more significant signs of improvement and the last quarter of 2009 actually showed growth.

“Despite ad spend declining overall in 2009, the final part of the year showed growth – a good sign of things to come this year,” said Ben van der Werf, Managing Director of Nielsen Global AdView. “But, while the first half of 2009 compares to a fairly strong, pre-crisis beginning of 2008, the second half of the year compares to a weaker end of 2008, which may ‘inflate’ the growth. In addition, having to react to the loss of advertising revenue, many media owners started applying much more aggressive discount policies which may not always be reflected in the trends reported at rate-card prices. If it is true therefore that signs of recovery can be seen, there should be more care in evaluating the extent of such recovery.”

With this in mind, it is clear that the last six months of the year started to provide some relief to the industry, with Television benefiting the most. Radio managed to close the year with the same amount of ad revenue gathered in 2008. Print on the other hand had the worst of the four major media types, with Magazines taking the bigger hit. Though not included in the global trends, Internet was the only media type to see ad revenue growth in the majority of the countries where it is tracked, and was often the only one to register a positive trend when the more traditional media suffered declines.

Despite crisis, some sectors increased ad budgets
With the economic crisis impacting more or less all industries, the advertisers have been cutting ad budgets throughout the year, no matter which industry branch they belong to. Three of the eleven reported macro-sectors have however spent overall more than they did in 2008, while all others have been reducing their advertising spend. FMCG (+10.6%), Healthcare (+6.1%) and Distribution Channels (+4.2%) are the three larger contributors to the growth. Automotive (-15.1%), Clothing & Accessories (-11.6%) and Financial (-11.4%) are on the other hand showing the largest percentage decreases and report declines in all regions. Telecommunications showed growth in the North American region, but this is not sufficient to balance up the advertising cut backs in Asia Pacific and Europe. Durables and Entertainment are investing more than they did last year in Asia Pacific and cut their budget in Europe less than they did in North America.

Slight improvement in the fourth quarter
The last three months of the year did bring some relief. The advertising market closed with a 4.5 percent growth versus the same quarter 2008 and marks the only positive sign of the whole year. This path is common to the majority of the countries. However, some major markets like USA, Japan, Italy and Spain are still showing percentage declines, though more contained than in the previous three quarters. The global 4.5 percent growth is driven by Asia Pacific (+12.0%) and Europe (+2.6%), while the North American advertising spend is still below the levels of the last three months of 2008. All media types except for Magazines benefit from the growth and show positive trends compared to the last three months of 2008.

Main media, defined by Nielsen as free to air TV, newspapers and magazines, increased 13 percent in 2008, while all other media (radio, outdoor, pay TV, cinema and other) posted an 8 percent increase for the year.

In 2008, three markets recorded declines in ad spend versus 2007, while another posted no growth:

• Taiwan (-11%)
• South Korea (-8%)
• Thailand (-4%)
• New Zealand (0%)

Meanwhile, five countries showed solid double-digit growth:

• India (29%)
• Indonesia (19%)
• China (17%)
• Malaysia (12%)
• Philippines (11%)

Other key findings from Nielsen’s research:

• A total of US$115.2 billion was spent on advertising in the twelve markets monitored.
• A total of US$108.4 billion was spent on “Main Media” advertising, with television comprising 70 percent of expenditures.
• Television ad spend grew 15 percent. Only three countries recorded declines in TV ad spend, while five countries posted solid double-digit growth in this category.
• Although Americans are being deluged with stories of newspapers closing, cutting back and filing for bankruptcy, the medium recorded 9 percent growth, with declines in four countries.
• Magazine ad spends, while still comparatively small, increased 10 percent, with India leading the way.
• Radio dominated “all other media” with a 47 percent share of spend and a 12 percent increase for the year.

Over the next few days, Nielsen Wire will dig deeper into the numbers for Australia and New Zealand, East Asia, Southeast Asia and India.

The automotive industry was hit by a Mack truck the second half of 2008 with all-time high gas prices, a shrinking economy and growing consumer fear of making a large purchase.  Advertising spend reflects how the automotive industry reacted to the crisis, highlighting channels that are the most vital to intercepting new vehicle prospects.

The first half of 2008 showed growth in advertising spend over 2007 for TV (+2%) and Internet (+55%) while outdoor, magazine, radio and paper decreased (20%, 18%, 14%, and 4%, respectively).  The second half of 2008 yielded a lower advertising spend over 2007 across all channels.  Radio and paper took the biggest hits with decreases of 42 percent and 40 percent, while Internet exhibited a similar level of spend vs. 2007 with only a 0.5 percent decrease.  Overall automotive advertising spend decreased 8.2 percent from 2007 to 2008, with the Internet being the only channel to witness growth.

Automotive Estimated Ad Spend: 2007 – 2008

Trended on a monthly basis, automotive Internet advertising was outpacing 2007 until October 2008 when the brakes were applied and it dipped below 2007 levels for the first time.  Automotive Internet spending in 2007 represented 4.6 percent of total Internet spend rising to 5.9 percent in 2008.  Acura, Hyundai and Subaru contributed the largest increase in Internet spend from 2007 to 2008 while Mercury, Volvo and Jeep had the largest decrease.  Thus far, Internet spend for 2009 is once again gaining momentum and is forecast to be on par with Q1 07 while still slightly below Q1 08.

Auto Internet Ad Spend As % Of Total Internet Spend

The Internet is proving to be a critical strategic channel for automakers and we anticipate the trend to continue.  Although TV continues to represent roughly three-quarters of total advertising spend, the Internet could likely become the second largest advertising channel by 2010.  The key to successful Internet spend in 2009 will be identifying where your target audience goes online and interjecting yourself at the right moment in the vehicle purchase funnel.