Biggest Advertisers Are Sending Their Dollars to Digital
By SYDNEY EMBER, NY Times
March 18, 2015
The country’s largest marketers are slashing their advertising budgets as they shift a larger portion of their spending to digital, according to new figures released on Wednesday.
The 10 biggest advertisers cut spending by 4.2 percent in 2014, to $15.3 billion from $16 billion a year earlier, according to the latest report from Kantar Media, a research firm owned by the advertising conglomerate WPP. Procter & Gamble, the top advertiser, lowered its ad spending in 2014 by 14.4 percent, bringing its expenditures to $2.6 billion, the report showed.
“Large advertisers in particular are the ones that are most aggressively moving budgets into digital, and the cost efficiencies of digital advertising enable many marketers to buy more for less,” said Jon Swallen, the chief research officer at Kantar Media North America.
A good portion of those dollars are going into fast-growing digital segments like video and mobile, which Kantar does not track.
Mr. Swallen said he expected the firm to introduce ad spending figures for other digital segments.
Online display ad spending in the United States was relatively flat in 2014, rising only 0.9 percent after a slow second half of the year, Kantar figures showed.
The slow growth in online display expenditures stands in contrast with the 5.5 percent increase in television ad spending last year. Cable television ad spending rose 6.8 percent, while network television expenditures — which were buoyed in large part by the Winter Olympics — increased 2.5 percent. Spot television spending was up 5.5 percent, driven mostly by political spending for the midterm elections.
Spanish-language television, which benefited from World Cup programming last summer, posted a 14.7 percent increase in ad spending, according to Kantar.
“TV is suffering on the margins from some minor shift in spending, but nowhere near as much as is commonly believed,” said Brian Wieser, a senior research analyst at Pivotal Research.
Over all, ad spending rose in 2014 by 0.7 percent, to $141.2 billion, according to Kantar Media.
No miracles happened for print media, where ad expenditures continued to plunge. Newspaper ad spending decreased 10 percent, and local papers slid 11.6 percent, according to Kantar Media. National newspaper expenditures were relatively flat, dropping only 0.3 percent. Magazine ad spending fell 5.1 percent.
Radio ad spending declined 3.9 percent, while outdoor expenditures dropped by 0.2 percent.