Ad Spend Data Analysis: Cinema bucks trend

LONDON - Ad spend dropped across all media channels year on year in January, with the notable exception of cinema. According to The Nielsen Company ad spend data, there were double-digit percentage declines in ad spend across the major media sectors of TV, national press, magazines, outdoor and radio.

However, there were some bright spots. Despite hundreds of redundancies announced in recent weeks, ad spend in regional press fell just 2%. And online display ad spend was flat year on year.

As expected, motor ad spend fell across every single media channel in January, again with the notable exception of cinema, where it increased 32%.

Outdoor benefited from a 27.6% rise in entertainment and media clients' outdoor spend, while radio also benefited from the media sector's sustained advertising in January, registering a 12% lift in media spend.

Tim Bleakley, managing director, sales and marketing, CBS Outdoor
All ad revenues have declined. If all ad revenues have declined by 20%, every media owner and sector in the first quarter that is doing better than a 20% decline is outperforming.

Outdoor is well placed. Outdoor and online will both come out fastest from the recession. People recognise the value in outdoor.

There are good news stories out there. With film, every other year is usually a good year because there aren't Olympics or football tournaments to distract people.

Other sectors doing well include some supermarkets, like Aldi and Iceland, which are promoting value and cosmetics, because people still need treats. People are trading down on luxuries but they still have to spend.

Rob Atkinson, managing director, Clear Channel Outdoor UK
Outdoor media is doing pretty well and the numbers reflect that. It's tough and challenging. [Spend in] March picked up a bit but it's coming in late. Clients want flexibility and the outdoor industry is listening, just look at what Clear Channel and JCDecaux did for Tesco.

We're looking at more and more flexible posting so we can compete with other media. We're not resting on our laurels. Clients want to know they will get back every pound they spend. Clear Channel has invested in proof of posting which is very important.

Mike Parker, strategic sales director, Channel 4
It's difficult to look at one month. The point is last year, the recession only started to hit in the second half of the year. We have to accept that for the first half of 2009 it seems to be ad spend in most product sectors are hard hit.

TV performed better last year. January was a particularly bad month this year. Going forward, TV will probably out perform the market in the first quarter; it will be down less than print and radio media. TV will outperform every one but online.

Advertisers are seeing a little bit more optimism in quarter two. The first six months will be down; the TV market will be down. The recession started in the second half of last year. Hopefully some of the drop will have happened last year [so things will get easier] but I don't think you can reasonably predict.

Brendan Condon, managing director, International, Platform A
2009 will be a tough year for all media but let's not overplay one months' figure. While advertising prices are coming down, online advertising is still more effective.

For us, travel is not being as badly hit as we might have anticipated and retail is performing particularly well.

Most of our uplift is from advertisers doing really smart things, irrespective of the sector they are doing business in, for example, by combining behavioural targeting with performance advertising.

Ed Couchman, commercial controller, future and digital media advertising, Channel 4
We think the online display market has actually declined by 15% to 20% year on year. Some agencies have said revenue from ad formats are down 30%.

I think next year the market will stabilise although overall it will be down 10%. Unsurprisingly, motor and finance revenue is down in January, but we have seen a 50% increase in revenue from the entertainment sector and 75% in Government and Charities.

Adam Bullock, sales director, TalkSport
It's been a tough start to the year for radio; [those sorts of figures] are fair for January and February. I believe there are some better signs for March and April. March is boosted by COI and April bank holidays give ad sales a boost.

We've done significant deals in sponsorship and promotions. Events will help us for the rest of the year but it's too early to say.

It will probably not be a bad summer because we have the Ashes, which is a big boost for sport radio, but it's very early to tell. All sales points are being very proactive. It's a good indication about how good your people are and how good a job you can do for your clients.

Greg Miall, managing director, Sport magazine
I am unsurprised by the statistics for magazines; they are in line with expectations. I think it will be up and down all year.

If you look back at last year, September and October were poor, but November and December were strong months.

I think January's figures are OK. A senior advertising person said to me that if you're down 20% that is OK.

Motors is very bad and I think will continue to be so for this year and next - all of a sudden it has just gone. Travel is okay as brands like BA are still advertising.

Andre McGarrigle, director of research and customer insight, Guardian News & Media
There were few surprises in these figures. Trading conditions are tough for all media at the moment and we expect this to continue in the short to medium term.

There is a direct correlation between the performance of the ad market and the broader economy.

Matthew Merret, director, regional press, OMD UK
I'm surprised display advertising is only 2% down. Classified took a massive hit in the last few months of 2008, but display saw a smaller drop, so it had a stronger base to recover from. I'm surprised at how quickly it's recovered.

Luke Bozeat, board director, MediaCom
The market is very unpredictable. The manufacturing figures predictions are down 50% so clearly, if fewer cars are being sold and being built, the ad market will be affected.

From Volkswagen's perspective, Volkswagen is committed to maintaining share of the car market. We will continue to spend in line with the market. It's difficult to see whether the drop [in spend] will continue if we're talking year on year 

Gemma Atkinson, sales director, Digital Cinema Media
Motor spend remains strong due to investment in sponsorship from advertisers and product support from brands. Cinema will attract spend due to its ability to reach the elusive 16-34 sector.

Chris Almond, business director, Arena BLM
January is the key advertising period for travel so it's no surprise that ad spend has declined less than other categories as companies still spend in January to reach those consumers that could be persuaded to book their holiday now.

National press and outdoor are the biggest casualties in overall terms with online and DM, predictably, the winners as advertisers cut spend to focus on media that delivers the more accountable ROI.

TV spend is down by 7% for travel but this is down to the decline in the relative cost of TV, as actual ratings bought increased by 15% year on year, meaning our clients can spend less to achieve the same effect as this time last year.

Further analysis of spend by travel category across Q1 shows that spend for nearly all travel categories is down, with the exception being the travel agents sector (which includes Thomas Cook, Thomson and First Choice among others) as all three big travel companies launched significant campaigns to lure customers for whom safety, security and inclusive packages would be of interest.

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