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Online Advertising Grows but Total Ad Spending Drops Over 14%

Ad Spend Plunges 14.2%; Only Online Posts Growth

Total measured advertising expenditures in the first quarter of 2009 plunged 14.2% vs. a year ago, to $30.18 billion, according to data released today by TNS Media Intelligence. This plunge followed a 9.2% decline in Q408 as the advertising recession accelerated into the new year.

Local media suffered most, with aggregate expenditures sinking 25.4% in Q109, TNS said. The rate of decline was similar across Spot TV (-27.5%), Local Newspapers (-25.1%) and Local Radio (-26.8%). Each of these segments was severely affected by deep spending cutbacks in core categories such as automotive, retail and local services.
(click image above to see full size chart)

For national media, combined ad spending fell 8.5% vs. a year ago. Within this segment, performance was sharply defined along the lines of print vs. TV vs. online.

National Newspapers (-28.5%), B2B Magazines (-25.5%), Consumer Magazines (-19.2%) and other print media were clustered together in terms of their percentage decreases as their revenue declines were driven by fewer ad pages, according to the data.

Network TV (-4.2%), Cable TV (-2.7%) and Syndication (+0.2%) occupied a middle tier of losses and each of these saw business improve slightly at the end of the quarter, paced by motion-picture and restaurant category spending.

The only area that showed any significant growth was internet display expenditure, which increased 8.2% as telecom, travel and local retail advertisers expanded their online marketing programs.

Ad Spending by Advertiser

The top 10 advertisers in Q109 spent a combined total of $4,019.5 million, a 5.7% decline from last year. Across the top 100 companies - a more diversified group of marketers representing nearly one-half of total ad expenditures - spending fell by 8.1%. The sharpest reductions occurred further down the rankings among the long tail of small advertisers who collectively account for the last one-fifth of total industry spending, said TNS. Media outlays among this fragmented group fell 22.3%, a reflection of their sensitivity to economic and business conditions.

Procter and Gamble, despite slashing ad expenditures 17.8%, remained the country’s largest advertiser with $674.1 million in spending. The company cut TV allocations by nearly 30% across its brand portfolio, while leaving magazine budgets untouched.

Johnson and Johnson was the only other packaged goods marketer in the top 10, and it increased total ad expenditures by 28.9%, to $397.2 million, its highest level of quarterly spending in two years.

Among the wireless telecommunication providers, Sprint Nextel aggressively hiked its spending by 30.3%, to $317.7 million, primarily to promote a new bundled value plan. Verizon Communications raised expenditures by 3.1% to $577.1 million while rival AT&T registered a small decline of 1.2%, to $459.4 million.

General Motors racked up only $424.2 million of ad expenditures in the quarter, a 19.1% drop from a year ago but a smaller rate of decrease than most of its competitors.

Ad Spending by Category

The Top 10 advertising categories in Q109 spent a combined $16,735.6 million, down 13.6% vs. a year ago. The aggregate drop was skewed by the reduction in auto category expenditures, which nosedived 28.4% to $2,309.0 million. Auto manufacturer spending was off 15.2% and dealer advertising was down a stunning 48.9%, paralleling a 38% decline in new-vehicle sales during the period.

Only two top categories registered spending increases. Telecom expenditures rose 3.0 %reached $2,078.1 million with gains occurring across major wireless, cable and satellite TV providers. Restaurant ad budgets were up 2.5% to $1,415.5 million, led by quick-service food establishments.

On the down side, Financial Services shed more than $400 million of spending and finished the quarter at $1,968.4 million, down 18.1%. Reductions were most prominent among loan products (-67.9%), credit cards (-41.0%) and retail banking (-20.7%). Other notable double-digit declines occurred among Local Services (-14.7%, to $1867.0 million), Direct Response (-17.4 % to $1,635.8 million) and Travel & Tourism (-14.3%, to $1,140.4 million).

“The ad market declined significantly in the first quarter, overtaken by a collapsing economy which prompted consumers and marketers alike to shut their wallets and conserve,” said Jon Swallen, SVP of Research at TNS Media Intelligence. “While there are hopeful signs of general economic indicators bottoming out, the advertising sector still appears to be lagging behind. Available data from second quarter shows ad expenditures tracking on a comparable plane to recent months.”


About the Automotive Digital Marketing Professional Community

The Automotive Digital Marketing (ADM) Professional Community website is built on a perpetually growing"Viral Expansion Loop" Networking Platform and serves Car Dealers, Dealership General Managers and their management teams, including Internet Sales Managers, BDC Managers, Marketing Managers, Sales Managers, Service Managers, Service Advisers, Parts Managers, Fixed Operations Directors and their teams. Launched at the beginning of January 2008, ADM has emerged as a valuable and proven resource for the entire spectrum of automotive marketing and Internet sales related professionals. Interactive Media and eCommerce Professionals at car companies (OEM) and tier 1 and 2 advertising agencies who want to see, hear and read what the best Digital and Interactive Marketing professionals in the automotive industry have to say about relevant and timely topics visit ADM on a regular basis or subscribe to the many RSS feeds and content syndication services available within the ADM community.

Did you know there are now over 2,100 members on Automotive Digital Marketing Professional Community?
Have you reached out to connect with important ADM member contacts by asking them to be your Friend?

Did you know that there are over 4,000 photos listed on Automotive Digital Marketing Professional Community?
And, do you know that many of these images are actually charts and graphs of the latest marketing trends and research? Did you know that many of these photos are actual ads used by dealers that worked exceptionally well? There have been over 4,000 photos uploaded and made available for use by all ADM members.

Did you know that there are more than 750 videos on Automotive Digital Marketing Professional Community?
Have you seen how many of those videos are actual examples of marketing campaigns and business processes used successfully by some of the leading and most successful dealers in America?

Did you know that there are over 500 blog posts on Automotive Digital Marketing Professional Community?
When was the last time you posted a blog entry and let important ADM industry professionals know what you are up to? Have you checked ADM for the latest articles published by writers who walk the talk? Members have created more than 500 blog posts within their ADM provided websites that feature online file storage and personalized blog hosting at no cost to ADM members.

Did you know that there are over 500 forum topics on Automotive Digital Marketing Professional Community?
Have you checked the forum lately to see what your associates, clients and colleagues are saying?
Have you posted a forum discussion to see what other professionals have to say about the topic?

There have been over 500 discussions started and still active with ongoing comments and information being published daily within the ADM Forum.

Did you know that there are more than 25 professional groups on Automotive Digital Marketing Professional Community?
Have you joined any groups so that you can send messages to all other group members?

Did you know that there are Important Upcoming Automotive Digital Marketing Events listed on Automotive Digital Marketing Professional Community?
Have you posted what you or your organization considers to be important upcoming events on the ADM calendar so that other professionals will know about them, consider attending and register their intent? ADM members can create calendar events using the ADM site application that allows image and logos, links to registration pages, location maps that integrate with Google Maps, Outlook Calendar integration, invitation mailings using uploaded email lists, RSVP tracking and event management features and a whole lot more.

Did you know that there are more than 500 MP3 audio files on Automotive Digital Marketing Professional Community? Have you checked out what other automotive professionals are listening to?
Did you know that many of these MP3 files are automotive marketing and Internet sales best practice Podcasts, and examples of highly effective radio spots, along with powerful and engaging dealer website soundtracks?

If you are interested in visiting and perhaps joining the Automotive Digital Marketing Professional Community, go to:

ADM was created to serve as a resource for Automotive Internet Sales and Marketing Professionals working in the digital and interactive media space for dealers with automotive franchises, car companies and the associated suppliers and technology providers serving the auto industry. Both OEM and Dealer associates are among ADM's most prolific members.

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Tags: Ad Spending, Online Advertising, automotive internet, internet sales


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