Just last week there were a plethora of articles covering media advertising spend and it’s slower than projected growth. Articles spoke of advertiser trepidations and longer decision making processes. Articles also gave examples of major advertisers who were spending less; AT&T advertising Q1’ was down 14.6 per cent, Time Warner down 6.8 per cent, Walt Disney Co. down 7.9 per cent and Johnson & Johnson down 15.3 per cent. However, with all of the similar coverage out there, we chose not to blog about it here. It wasn’t until we saw an interesting comment from TNS Medias John Swallen, SVP Research of TNS Media Intelligence. “There are some things that are different about this slowdown,” he said, adding: “The advertising economy is a subset of the general economy. What’s different about this economic cycle is that it is consumer-led. The last big turndown that we had in 2001, post-9/11 and the dot-com bust wasn’t so much of a consumer-led slowdown. There were other economic factors. This one feels different. What we’re in right now is a period in which consumers are stressed and strained by rising food prices, rising fuel prices, a crunch on credit, and a feeling that things will get worse before they get better. Without a rise in consumer spending, that [disincentivizes] marketers from ramping up consumer ad spending.” Within the same article, Swallen indicated that advertisers conversion from traditional media to new has also affected the economic slowdown. With the Internet introducing clever and innovative ways to reach intended audiences, the dire necessity to utilize traditional forms of advertising (yes – both online and in print) have lessened. Advertisers are finding the unconventional ways of reaching an audience, and all for less of an investment.
Further on the note of advertiser spending, Swallen states that the trend of lessening newspaper advertising revenue will continue and that consumer magazines will follow closely behind in that trend. Note, to date, consumer mag’s have recorded single digit increases, but advertisers have now started to look for the same sense of flexibility they receive when advertising online. The rigid, long-term commitment contracts magazine publishers expect advertisers to succumb to, won’t last for long.
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