More

    Ad spend declines for fourth consecutive month in September, report finds

    • Ad spend continues to reflect tightening budgets and economic uncertainty, according to Standard Media Index’s September 2022 Core Data report, which found that ad spend was down 5% in September year-over-year (YoY), continuing a four-month downfall.
    • The report also found that ad spend by channel in the third quarter YoY is down 6%. Coinciding with the lows, major media companies including Disney, Comcast, Paramount Global, Meta and Google all saw revenue fall in September YoY. 
    • Among the channels to take a hit, television, radio and magazine ad spend saw double-digit dips in the third quarter, and though several advertising sectors saw declines, pharma, retail and travel advertising spend each saw a boost.

    September marks the fourth-consecutive month that ad spend saw a dip from the year prior, representative of persistent economic woes and macroeconomic conditions that have caused many marketers to reevaluate spending choices. As mentioned in the report, the fourth quarter now represents a crucial period to determine whether or not the market will turn around, and it may, as marketers report they have plans to up their promotions this holiday season to recoup projected losses. 

    Despite the third quarter’s dip, there were a few bright spots — Digital ad spend grew 5% to roughly $13.2 billion YoY, representing a two-thirds share of ad dollars. Newspaper ad spend also grew, jumping 22% YoY and out-of-home ad spend increased 14%. Still, those gains couldn’t offset a 23% drop in linear television ad spend, an 18% drop in radio ad spend and an 11% drop in magazine ad spend YoY. Namely, Cable TV spending fell $284 million for the quarter. 

    Among sectors, pharma’s ad spend saw a jump, increasing by over $104 million (up 12%) in September YoY, joined by a 30% jump in travel ad spend. Other categories that grew include Retail (3%), Auto (6%) and CPGs (1%). Other sectors saw a decline, namely Wellness, which fell 35%, followed by a drop in Tech ad spend (-21%), Entertainment and Media (-9%), financial services (-10%), General Business (-10%), Restaurant (-1%) and Apparel and Wellness (-1%). 

    Such declines took a toll on the country’s top five media companies, all of which saw September’s media revenue decline year-over-year. Disney and Meta fared better than the others, each down only 2% in September YoY while Comcast fell 5%, Paramount Global fell 12% and Google took the highest toll with revenue falling 13%, a drop that could be explained by a $147 million decline in Search revenue YoY last month.

    The SMI Report comes as another outlet, ECI Media Management, projected North American ad costs will increase 6.2% this year, up nearly a full percentage point from the 5.4% the company projected in February. As a category, television ad costs are expected to increase 13.4% this year, while online video will go up 8.2%, according to the firm. Those increases are being fueled by the after-effects of the pandemic, the ongoing Ukraine war, and concerns about a looming recession, according to ECI Global CEO Fredrik Kinge

    Such developments may lead marketers to chase earned media more frequently as a hesitancy to spend grows. At an Advertising Week panel this week, Pepsi CMO Todd Kaplan discussed the overvaluation of paid media and noted that the current state of media fragmentation is a “double-edged sword.”

    spot_img

    Latest articles

    Related articles

    spot_img