Ad spending decline, Begins To Rise Again

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According to the Standard Media Index (SMI) October survey, business ad expenditure is beginning to rise once more after falling for 5 straight months.

Even while this growth is sluggish, the fact that the decline is reversing itself can already be seen as a plus, especially during these time of year-end celebrations.

Which media do businesses invest in more?

The advertising industry is likewise still settling in after a particularly strong year. According to SMI’s data, ad spending increased by 20% between the fourth quarter of 2021 and the first two months of 2022, which is much greater than the long-term average market growth rate of 2-5%. In actuality, October 2022 is 6% higher than October 2020.
In terms of media channels, linear TV and digital search fell 15% and 16%, respectively, from the prior year in October. However, digital media increased, increasing 5% and accounting for 57% of all ad dollars spent in October. Out-of-home advertising expanded quickly as a result of greater funding from the media, fashion, and auto industries. Unexpectedly, newspaper investments increased as well, ending a string of four years in which they had been sold off.

What product categories are getting the most funding?

In addition to pharma, restaurants, fashion & accessories, and travel posting excellent October results, the automotive and CPG industries also saw a rise in ad expenditure. Technology, entertainment & media, financial services, general business, retail, and wellness were the other six industries that all experienced decreases from the previous year. With investment down roughly $400 million from the same time last year, technology suffered the most.

What were the October results for the leading media companies?

The biggest media businesses’ ad income were down due to the drop in linear TV and digital search. For the first time ever, Google’s ad revenue fell as a result of the reduction in digital search. Fox, Comcast, Disney, and Paramount all experienced double-digit percentage decreases in ad income year over year.

What can we anticipate for the year’s end?

The information offered by the SMI study provide useful information on the global advertising environment at the moment.

The previous events continue to have a significant impact on the global economy and, as a result, how much money businesses are ready to spend on advertising today.

We might be somewhat optimistic about the October statistics, though, as they ended a 5-month downturn and eclipsed the greatest level attained in 2022.

The Association of National Advertisers (ANA) conducted research that suggested that advertising spending will rise significantly by year’s end.

Their analysis is based on key seasonal events at the end of the year, such as: the World Cup, the American elections, and the population’s vacation after a protracted period of quarantine, in addition to the record peak of this time.

In order to take advantage of this time and produce outcomes that exceed expectations, marketing professionals must apply care and, above all, a great deal of inventiveness. It is crucial to approach this fall in advertising investment with optimism.

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