Ad spend predictions pessimistic

Ad spend falling.

December 19, 2011: Despite slight growth during the first nine months of 2011, ad spending – which includes B2B marketing – has experienced a noticeable decline since the start of the year, according to a recent study from Kantar Media.

Specifically, ad spend, which was up 4.1 percent during the first quarter of 2011, fell to 2.8 percent in the second quarter and just 0.4  percent from the July to September period.

"'The cautious optimism for the advertising market at the beginning of 2011 has been replaced by the statistical evidence of progressively slowing growth rates," said Jon Swallen, senior vice president of research at Kantar Media North America.

Paid search spending fell rapidly during the third quarter, by 14.4 percent, and the ripple effect was felt by internet media spend, which dropped by 2.9 percent.

MediaPost reports a recent Barclays Capital study projected similar results, calling 2012 a "low growth environment" for the ad agency business. The financial firm estimates organic growth revenue will drop from the current rate of 5.6 percent down to 2.9 percent, due primarily to a shift in ad dollars from local to national media.

However, despite the negative outlook, Barclays still believes agencies remain valuable and will rebound with the rest of the economy. 

Categorized: Industry News

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