US ad spend declined 1.7% in first nine months of 2008

Jon Swallen, SVP Research at TNS Media Intelligence, said: “Media ad spending, which began tiptoeing into negative territory in early 2007, has crossed an inflection point in the past six month as the economic downturn has become more widespread.

“Preliminary data from the fourth quarter indicate a further slackening of the overall advertising market. Consumer spending levels, which drive the corporate profits that in turn fund marketing budgets, remain a serious concern and will have a strong influence on the depth and duration of the current difficulties facing advertising.”

In November, eMarketer revised down its projection for US online ad growth putting it at $25.7 billion in 2009 (see eMarketer revises down US online ad growth).

TNS said that for the nine month period, internet display advertising expenditures increased 7.0% as marketers continued to expand their online investments. However, growth rates have been getting smaller for five consecutive quarters.

The Summer Olympics boosted third-quarter Network TV ad spending and turned a six-month loss into a nine month gain with year-to-date expenditures up 3.0%.

Consumer magazine ad spending was down 3.8% with the reduction broadly distributed across a number of key categories including apparel, direct response and pharmaceutical.

At the start of the month, Steve Lanzano, chief operating officer of MPG North America, said that he expects US advertising spending to drop by 5% in 2009 (see US ad spend expected to drop 5%).

Lanzano told the Reuters Media Summit in New York: “I think the real key for next year is going to be the second and third quarter. I think if the economy continues to go south, you’re going to see some real hits across all media in the second and third quarter of next year.”