Advertising Begins to Stabilize

The long, steep decline in advertising spending finally may be on the wane. A new survey by New York-based research firm Kantar Media shows that the decline in spending slowed dramatically at the end of 2009. And network and cable TV advertising actually rose, although that gain was offset by declines in radio, magazine, newspaper, and Internet spending.

“This reflects the increased confidence among advertisers about the prospects of impending economic recovery and improvement in consumer spending,” Jon Swallen, Kantar Media’s senior vice president of research, said Wednesday in an interview. That would be welcome news for the media business, which has been hit hard by the recession.

Ad expenditures in the fourth quarter fell 6 percent from the fourth quarter of 2008. It was an improvement compared with the 15.1 percent decline in the third quarter, the firm said in a report. For the full year, total ad expenditures dropped 12.3 percent, to $125.3 billion.

The top-10 advertisers of 2009 spent a collective $16.6 million, 0.9 percent lower than the prior year. Procter & Gamble spent the most, with Verizon Communications ranking second. The two largest spending categories were automotive and telecom companies. The smallest advertisers—those underneath the top 1,000—collectively spent 20.3 percent less last year than in 2008.

While Kantar Media does not make formal projections, Swallen expects a continued pickup in ad spending in the first quarter, which got a boost from events such as the Olympics and the Super Bowl. “While advertisers are cautiously optimistic, I don’t think we’re out of the woods quite yet,” Swallen said. “A pickup in consumer spending is going to be required to justify and sustain advertiser faith.”