Advertising stunk in the first quarter
First quarter estimates released by The Nielsen Co. showed spending declined 12 percent to $12.9 billion, lead by double-digit declines in magazines, radio, outdoor and newspapers. Cable TV dropped 2.7 percent while network TV fell 4.8 percent and Internet display ads were off 3.4 percent. Though search was not measured by Nielsen in its report, it is not immune from the overall economy.
Interestingly, one of the few bright spots was in the direct response area, which gained 14 percent. These are spots for companies such as The Video Professor, The Snuggie and Rosetta Stone. Fast food joints were also heavy spenders, jumping 7.7 percent.
Nielsen does not give projections but it's unlikely that they will improve significantly this year. Advertising is the first thing that gets cut when the economy goes south and the last thing to get restored when things rebound. For radio, magazines and newspapers, their goal of regaining advertising dollars will be especially difficult. Many advertisers have switched from traditional media to the internet.
In addition to the economy, this year lacks big events such as a presidential election or the Olympics. Spending would have gone down anyway without the worst financial crisis since the Great Depression.
The result is that the world of advertising has been turned upside down. The world must have gone mad when ubiquitous pitchman Billy Mays is starting to become a more influential advertiser than General Motors (GMGMQ).