You don't need to be a fan of the popular TV show "Mad Men" to know that the advertising business means big bucks. However, the industry is very different these days than is portrayed in the show, which is set in the 1960s. There are more dollars being spent and there is a wider array of options for advertisers to fork over their cash in the hopes of luring customers. Kantar Media reports that total advertising expenditures in the first six months of 2011 increased 3.2% from a year ago, and shows little sign of stopping. Where the dollars are being spent, though, is what's shifting.
Here are some examples of where advertisers are spending their money these days:
Television is still king when it comes to advertising dollars. Barclays Capital estimates, TV ad spending could reach $60 billion this year. But there has been a marked spending shift from network TV. Kantar Media reported network TV advertising fell 7.6% during the first half of the year, to cable networks, which saw an 11.8% rise. Sports played a giant role in the change, including the move of college football bowl games and the NCAA Men's Basketball Tournament programming from broadcast networks to cable. The drama surrounding the two professional league lockouts -- the National Football League and National Basketball Association -- kept advertisers on the edge of their seats, but ultimately grabbed big ad dollars when all was eventually resolved.
Despite its surge in nearly every other venue, online ad spending is still behind TV dollars. It is, however, expected to reach $30 billion in the U.S. this year -- up about 15% from its estimates for 2010. Internet media accounted for more than one-half of the dollar gain in total ad spending during the first six months of the year. Display spending jumped 12.9% and search investments rose 8.6%, according to Kantar Media, which cited the travel, local service and insurance categories as prominent factors so far for the year.
If you have a product or service to sell, it's likely there's an app for it that's available for your mobile device. According to ABI Research, they estimate that 29 billion apps will be downloaded in 2011. Gartner reports that by the end of 2011, mobile advertising will generate $701 million in revenue in North America . This is more than double that of $304 million in 2010. As revenue from mobile advertising continues, it is only a matter of time before more advertisers jump on this growing trend and try to take a piece of the large mobile advertising pie.
The pace of spending over the airwaves has steadily declined over the last few years, but advertising on local radio was up 2.4% compared to a year ago, perhaps due to more stations moving to digital platforms. Sales stayed soft through the first half of 2011 but Nielsen reports show that advertisers are continuing to invest internationally, with a focus on the growing Asian and Latin American markets.
The decline of the newspaper and magazine media outlets continues to drag down the ad market. National newspaper ad spending fell 4.9% and Spanish language newspapers dropped 5.9% through the second quarter of 2011, according to Kantar media. Research firm eMarketer reported that advertising spent in newspapers (print and online) fell to $25.7 billion in 2010, a drop of 6.6%. However, the local newspaper segment ended its streak of 22 consecutive quarters of spending declines and eked out a 2.5% increase, and a 0.6% gain for the half year.
The Bottom Line
As long as there is a consumer audience, companies will spend money hawking their goods and services. But marketers must keep up with the times, and follow the trends to ensure their efforts get the biggest bang for their buck.
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