First-half ad $s
were down 5.9%

And 2Q spending was weaker than 1Q, off 6.3%

By Kevin Downey

    If you’re the wagering type and had enough moxie to bet that the ad economy would get worse before it got better, you can collect your spoils.
    Ad spending in the second quarter of 2001, in fact, was far worse than it was even in the grim first quarter of this year.
    Advertising expenditures dropped about 6.3 percent compared to the second quarter last year, to just over $24.9 billion. 
    That comes on top of a 5.2 percent drop in first-quarter spending, to $22.6 billion, and brings spending for the first-half of the year down 5.9 percent, to $47.5 billion.
    Those are the findings of CMR, which yesterday released ad expenditures for all major media types and top advertisers.
    While most media types suffered, the biggest loser was spot television.
    That’s at least partially due to the loss of ad expenditures from last year’s presidential campaigns, which pumped billions of dollars into local TV.
     Ad spending in the medium dropped by nearly 15 percent, or well over $1 billion, to $7.18 billion.
    Spot TV falls behind only network TV and magazines as the largest advertising vehicle.
    Other big losers included Sunday newspapers, which fell by over 10 percent, to $4.8 billion in ad expenditures.
    Spending in daily newspapers dropped 6.6 percent.
    And on a considerably smaller scale, ad expenditures dropped over 22 percent in national spot radio in the first six months of 2001. Network radio expenditures fell a bit over 12 percent.
    As most forecasters have pointed out this year, amidst the ongoing declines in ad spending, a handful of media types are continuing to do well.
    Ad spending on cable TV, for example, was up 4.6 percent in the first half of the year. Expenditures increased 5.1 percent on syndicated television, 3 percent in outdoor, and 1.5 percent in Sunday magazines.
    Overall first-half ad spending fell by $2.9 billion, from  $50.4 billion to $47.5 billion. 
    A disproportionate amount of that decline came from the country’s biggest ad spenders.
    The top 10 advertisers, which account for about one out of every seven dollars spent on advertising, reduced expenditures by 7.1 percent in the first half of the year.
     General Motors was the biggest spender with over $1.1 billion in the first six months of this year. The automotive giant trimmed its ad spending by $339 million, or 23.5 percent.
    Spending by Philip Morris fell 16.3 percent, DaimlerChrysler was down 8.7 percent, and Procter & Gamble’s ad spending was trimmed 2.8 percent.
    The only significant increase in spending among the top 10 advertisers was for the newly formed AOL Time Warner, the third-biggest advertiser. The merged company’s expenditures increased by nearly 22 percent.
    The dire news about the protracted slowdown in the ad economy follows a number of projections for the first year-to-year decline in advertising expenditures in a decade.
    Just last week, Zenith Media further lowered its outlook for total-year expenditures. The company had lowered its forecast to a 2.0 percent decrease just a few months ago but has now reduced that to a 4.2 percent drop.
    CMR has also lowered its forecast and is now predicting a 2.0 percent decline in spending. That compares to its earlier forecast of a 3.8 percent increase.

TOTAL ADVERTISING EXPENDITURES
First-Half 2001 by Media-Type
Ad $ in Billions

Medium

2001
Jan-June

2000
Jan-June

% Change
2001 vs 2000

Network TV

10.43

10.68

-2.3

Magazines

8.10

8.48

-4.5

Spot TV

7.18

8.42

-14.7

Cable TV

5.52

5.28

4.6

Sunday Newspapers

4.80

5.36

-10.4

Daily Newspapers

4.07

4.35

-6.6

Syndicated TV

1.62

1.54

5.1

National Newspapers

1.59

1.60

-0.9

Outdoor

1.22

1.18

3.0

National Spot Radio

1.03

1.32

-22.4

Sunday Magazines

0.54

0.53

1.5

Network Radio

0.41

0.47

-12.4

TOTAL*

47.5*

50.4*

-5.9

* Includes media not shown
Source: CMR, a Taylor Nelson Sofres company

 

ADVERTISING EXPENDITURES
Top-10 Advertisers
Ad $ in Millions

Company

2001
Jan-June

2000
Jan-June

% Change
2001 vs 2000

General Motors

1,102

1,441

-23.5

Philip Morris

863

1,031

-16.3

AOL Time Warner

734

602

21.9

DaimlerChrysler

715

783

-8.7

Procter & Gamble

688

708

-2.8

Ford Motor Company

652

647

0.8

Walt Disney

489

529

-7.6

Johnson & Johnson

479

471

1.7

Pepsico

418

425

-1.6

Pfizer

405

412

-1.7

TOP-10 TOTAL

6,545

7,049

-7.1

Source: CMR, a Taylor Nelson Sofres company


September 5, 2001 © 2001 Media Life

-Kevin Downey is a staff writer for Media Life.


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