“ There's a Turn, But Will There Be a U-Turn?” which is a bottoms-up analysis of quarterly U.S. advertising trends using publicly reported, quarterly financial results.
Highlights of the report include:
* Q2 U.S. advertising growth was -14.0%, 190 bps better than the decline in 1Q and the first sequential acceleration in quarterly growth since 1Q:08. Excluding Online, growth in traditional media advertising declined by -16.5%, 300 bps better than the decline in Q1. According to the report, Q1’09 was the trough in advertising growth.
* The sectors that drove the sequential improvement in advertising growth were Retail, Media & Entertainment, Telecom, and Government/Political. 17 out of 19 industry sectors reduced advertising spending year-on-year in Q2. The 2 industries that increased advertising were Telecom (+17%) and Restaurants (+4%). Telecom advertising growth in the second quarter accelerated to an astonishing 17.4% compared to 4.0% in the Q1. Telecom alone accounted for over 60% of the sequential improvement in growth. The biggest beneficiaries of the increase in Telecom advertising in the Q2 were Display Internet and Broadcast Networks.
* In terms of contribution to the Q2 decline, Newspapers led the way, accounting for 27% of the total decline, followed by TV Stations (18%), Radio (17%) and Online (9%). Cable Networks posted the smallest decline in the second quarter, at -3.8%, followed by Broadcast Networks at -4.6% and Online at -5.5%. Only 3 out of the 32 companies in the Ad Tracker posted positive growth in the second quarter: Google (+3.5%), Discovery (+0.7%) and National Cinemedia (+11.6%).
* The declines in local advertising (e.g., TV Stations, Radio Stations, Newspapers) continue to outpace the declines in national advertising. Local advertising declined by -23.3% in Q2 compared to the national advertising decline of -6.3%. Local advertising has not posted positive growth since Q4’06, and this is only the third quarter that national advertising had declined – in sync with the recession.
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