Tuesday, March 17, 2009

Quickservice restaurant advertisement spending down


The Nielsen Company reported today that U.S. advertising for the full year 2008 was down 2.6% compared to the full year 2007. According to preliminary figures from Nielsen, U.S. ad expenditures declined almost $3.7 billion to a total spend of $136.8 billion in 2008.

Hispanic Cable TV (+9.6%) and Cable TV (+7.8%) were the only two media to show ad growth in 2008. Cable was the highest revenue-generating medium with $26.6 billion in sales.

“Given the state of the U.S. economy, a decline in ad spending was expected, but it’s not as bad as it could have been,” said Annie Touliatos, VP of Sales Development for Monitor-Plus, Nielsen’s ad tracking service. “The campaign season and the Summer Olympics were two big events that had a tremendous impact on advertising, especially on TV buys.”

Print media continued its anticipated decline in 2008. Local and National Newspaper ad spends declined 10.2% and 9.6%, respectively. National Magazines fell 7.6%, while Local Magazines dropped 3.7%.

New media was also hit by the tough economic climate. Internet ad spends dropped 6.4% and Network TV took a 3.5% hit. Nevertheless, television continued to be the dominant medium for advertisers, with 60% of all ad dollars spent on Network, Cable, Hispanic, or Spot TV.

Spanish Language TV (network and cable) advertising continued to grow at a clip of 0.8%, while African-American TV fell 3.4%.

ADVERTISER SPENDING
The top 10 advertisers spent a total of $15.5 billion in 2008 – 15% less than the year before. Not a single one of the top 10 advertisers spent more in 2008 vs. 2007. Procter & Gamble maintained its perch as the top advertiser this year, despite a 19% decline vs. 2007.

Detroit’s Big Three automakers held on to spots in the top 10, despite double-digit percentage slashes in their ad budgets. Cerberus Capital Management (Chrysler) and Ford Motor Co. cut advertising 31% and 29%, respectively. General Motors trimmed its advertising 15%. Foreign automakers Toyota and Honda each made the top 10, but they, too, slashed their ad spend 7% and 3%, respectively.

No fast food parent companies cracked the top 10. But Yum! Brands (11th), parent company of Taco Bell and KFC, spent $5.6 million more on advertising in 2008, while McDonald’s (13th) boosted its ad spend $5 million.

Wal-Mart (19th) showed perhaps the most impressive ad growth in 2008. The retail giant increased its spend 55% over the previous year with $771 million in ad buys.

PRODUCT SPEND
The automotive industry’s ad spending fell hardest in 2008. The industry slashed its spending by almost $1.8 billion, or 15.5%.

Pharmaceuticals also cut back its spending significantly, declining 18% and almost $1 billion compared to 2007. Quick Service Restaurants, however, was the only category in the top 5 to spend more in 2008, with 3.8% more expenditures in 2008. Direct Response placed 8th, having grown its ad spend 9.2%, thanks to increased spending by companies like Video Professor (+389%), Allstar Marketing (+318%) and Rosetta Stone (+73%)

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