For top ad categories, haves and have-nots

It was a strong second quarter for auto advertising, with ad spending up 7.7 percent over a disastrous second quarter 2011 and dealerships seeing a particularly large gain.

But for most of the other top-10 advertising categories, last quarter was a downer.

Four of the top 10 cut spending, according to Kantar Media, and total revenue for the top 10 was up just 1.3 percent during the quarter, compared to a bump of 3.1 percent during first quarter.

Most notably, several categories that had been seeing strong spending abruptly cut back.

Financial services was the most notable example.

During first quarter it was up 10.1 percent, the biggest gain for any top-10 category, with growth driven by a push in marketing for retirement planning services and bigger budgets for tax preparation firms during tax season.

But in second quarter that spending dried up. Financial services was actually down 3.4 percent as credit card issuers cut back on their spending and the consumer banking industry showed continued weakness.

Likewise, food and candy, which had been ratcheting up ad spending since the recession began in 2009, cut back by 5.5 percent. The category was up 0.7 percent in first quarter.

The lesson from this latest round of numbers is that it’s still a very volatile marketplace for advertisers. A category that’s spending like gangbusters one quarter may suddenly go bust the very next month, especially when spending is dependent on a particular subcategory.

Retail, for example, saw a huge 8.6 percent jump in first quarter as J.C. Penney spent heavily on a rebranding campaign that prompted other department stores to up their spending as well.

But after the Penney strategy flopped and the store pulled back on advertising in second quarter, retail spending was up only 0.9 percent, pulled down by lower spending in home improvement and home furnishing stores as well.

Some categories did see solid growth during second quarter, though it’s difficult to forecast whether that will hold up.

Automotive’s gains were due to the return of advertising by Toyota and Honda, which were hit hard by last year’s Japanese earthquake and tsunami. The natural disasters disrupted production in the companies’ plants, and so many dealerships suspended advertising because they did not have enough product in stock.

During second quarter of this year, however, supply levels were back to normal and the category faced soft comparisons because of last year’s pullback.

Kantar notes that when Honda and Toyota are removed, second-quarter automotive spending levels were flat to last year.
 

Tags: ad categories, ad spending, advertising, auto, automotive ad spending, campaign, Financial Services, financial services ad spending, kantar, kantar media, Local Services, retail ad spending, Second Quarter, TOTAL, Travel Tourism