Don't look now, but the ad market might be picking up

Posted 09 September 2009 00:13am by Meghan Keane with 2 comments

• Tweet

• Tweet

After a year of falling media budgets and ad spending restrictions, positive hints about the advertising market are starting to pop up. Except after the trauma that hit the ad market last year, no one wants to be on the record saying that the ad spend has hit bottom and is set to pick  up.

And yet, that's what it's starting to look like.

This month, Nielsen released numbers detailing exactly how bad the ad spend got in the first half of this year. The number's aren't pretty, but they point to the fact that things might (gasp) be starting to get better.

We've been hearing a lot about how ad dollars lost during this recession aren't going to be coming back. Brands that decided to cut their advertising and marketing budgets found better ways to spend their money (both in the digital space and with other forms of marketing). But part of the cutbacks were preemptive measures and recessionary fears may be subsiding.

Maurice Lévy, CEO of the Publicis Group told the New York Times last week: “It’s not a big rebound, but there are some interesting signs."

Meanwhile, AdAge writes that despite the disastrous first half of this year, things are starting to pick up around the industry.

According to Nielsen, the 15.4% drop in U.S. ad spendingduring the first half of 2008 was the biggest plunge since the company started tracking the market. Cable ads were the only growth point, earing 1.5% more than the previous year. Elsewhere the losses varied from 1% for display advertising on the web to a 45.7% drop for local Sunday supplements in newspapers.

Carlos Lamadrid, senior VP-chief brand officer at the Woman's Day Brand Group, tells AdAge:

"The most shocking thing about the first quarter was how advertising that was booked started just cancelling. The phones rang off the hooks, and not in a good way. In a period of just a few weeks, schedules just disappeared. Budgets just went away."

But now things are picking up. According to AdAge: "Now, unlike at the start of the year, the phone is ringing in a good way."

This week, 33% of advertisers surveyed by Round2 Communications say they will increase their spending over the next three months.

Out of 5,300 senior execs polled, 24.7% said they planned to increase spending 0%-10%, 5.5% said by 10%-20%, 1.4% by 20%-30% and 1.4% said they planned to increase spending 40% or more.

Things are still not good for print. While 76.6% of respondents said they previously used print media, almost half (46.6%) of respondents said they expected print expenditures to decrease in 2009.

Those numbers aren't conclusive, but projections for digital are better. According to Yankee Group, online ad revenues will grow 1.8% to $23.63 billion. eMarketer thinks that U.S. online ad spending will increase every year through 2013, and hit $24.5 million this year.

While these estimates may not be overwhelmingly optimistic, the ecomonic upheavel over the last year puts it all into perspective.

It has been a year since the U.S. economy and the ad industry went into a tailspin. Without big ticket items like a presidential election and the Olympics this year, it's hard to pinpoint a single huge event that will bring the advertising market back into the black, but at a certain point, there's simply nowhere to go but up.