Summary
Nielsen has just released first quarter ad spending data for all media sectors, with all sectors of the media industry showing declines ranging from single to double digits.
Analysis
To say "it is ugly out there" is an understatement when looking at first quarter advertising spending in a report issued by Nielsen. Virtually every sector of the media was down, ranging from a 1.1% decline in Spanish Language Cable TV to a whopping 37% in Sunday newspaper supplements. English or "general market" Cable had the second smallest decline at 2.7%.
Surprisingly, Internet display advertising was also down for the first time since it has been tracked, declining at a 3.4% rate.
When you take the perfect storm that hit US automakers, retail establishments, and financial services in 2008 along with a dour economy and rising unemployment, it is no wonder the numbers were bad. The question is when or if this will turn around.
At our university we've been operating a Media Sales Institute the last two weeks, and we've had a number of speakers who will remain unidentified come in and talk to students about the current environment. The common themes--2010 should be better thanks to political advertising, and what many hope will be a reviving economy. But all the pros are also talking about a major reset--or what can be described as a "new normal."
The concept of a "new normal" means in a nutshell the following: (1) ad spending for traditional media is facing a long-term secular decline, and the economy has just helped to magnify this trend; (2) media companies are going to continue to contract and do more with less, meaning personnel and resources; (3) Internet/digital media along with social networking is going to grow and grab more ad dollars at the expense of traditional media like radio, newspapers, and local TV.
Hopefully, the 2nd quarter will look better. Hopefully.
