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Global Ad Spend Rebounds 12.5 Percent in Q1 2010 Driven by Spending Surge Latin America and Asia

4 minute read | July 2010

Ad spend up 4 percent in , 18 percent in and flat in

Television leads growth globally, newspapers rebound, but magazines remain challenged

FMCG remains top ad spend category with strong recovery from Financial Service and Automotive industries

NEW YORK – July 12, 2010 – Global ad spend at rate-card values in the first quarter of 2010 increased 12.5 percent year-on-year totaling USD $110 billion, boosting the hopes of the global advertising industry.  All regions posted positive growth in the quarter, with Latin America driving the biggest increase, up 48 percent in ad spend compared to Q1 of 2009, according to the latest Global AdView Pulse report from The Nielsen Company.  Brazil, Mexico and Argentina posted the highest ad spend year-on-year increases in Q1 (55%, 43% and 35%, respectively), followed by India (34%) and Hong Kong (24%).  Ad spend in USA, the world’s largest ad market, increased four percent year-on-year.

“After 18 consecutive tough months for advertising, we’ve finally hit positive territory and turned the corner, but these growth numbers are coming off a very weak base and are mostly based on rate-card figures,” said Michele Strazzera, Deputy Managing Director, .  “While a double-digit recovery is a promising sign, numbers are still considerably far from pre-recession levels and the dimension of the growth is indeed linked to the poor performance of the first half of 2009. Nevertheless, we’re seeing advertisers regain confidence again especially in financial services and automotive industries, which were two of the hardest hit sectors during the recession.” 

Three of the world’s largest automotive companies are featured in the top ten advertisers in Q1.  The Winter Olympics in and the run-up to the World Cup also provided a boost to global ad spend in Q1, but it is expected that the year will close flat or slightly positive in real terms.

Regionally, ad spend increased by 13 percent in Asia Pacific, although it remained flat in .  benefited from the 2010 World Cup with an 18 percent increase in spending, while recorded an increase of 7 percent. Within the top five European markets, faced the biggest challenge to recover.  showed the strongest growth with double-digit increases for its top ten advertising sectors.

“The growth of advertising is closely following the path of the post-recession boom in . That said, it’s important to put these impressive growth numbers into context.  The Q1 spend overall represent a more contained 16 percent increase versus the pre-crisis 2008 numbers,” added Strazzera.

In Asia Pacific, nine out of 13 markets posted double-digit growth led by (34%), Hong Kong (24%), (24%), (23%), and (22%). , the largest ad spend market in the region, and ranked in the top three globally, increased by 18 percent totaling USD $22 billion.

In Europe, amongst the top five markets, recorded the biggest ad spend growth of 11 percent, followed with 8 percent. Of the remaining major markets, and showed growth of 5 and 8 percent respectively, while continued to post a decline of 3 percent.

Globally, television attracted the largest share of advertising, up 16 percent in Q1 compared to the previous year. TV ad spend posted double-digit increases in every region from Latin America (53%) to (9%). A review of previous recessions indicates that advertisers returned to TV as their main medium once ad spend was back on the cards since it allows them to be seen and heard by the widest audience.

“A return to television spend is another positive sign of recovery.  If we exclude the Internet, which was the only medium to post growth last year, television has been the medium to lose the least and the first one to bounce back,” continued Strazzera.

Radio and newspaper ad spends rebounded with 10 percent and 9 percent growth respectively.  Meanwhile, magazine advertising remained flat on a global basis, but declined 7 percent in . 

 “Though still negative, this is the best quarterly result registered for magazines in since Q2 2008. While still in decline, there is improvement compared to 18 months ago,” said Strazzera.

Looking outside the four major traditional media types, the Internet continued its positive trend, and closed the first quarter of the year with a 12 percent ad spend increase versus the same quarter in 2009.

Fast moving consumer goods (FMCG) companies—the top ad spenders in 2009—continued to be the largest spenders in Q1 2010 (+23 percent) while automotive (+19 percent), financial services (17%) and durables (16%) rebounded in every region.  Within the FMCG sector, all categories posted growth of more than 20 percent increases with Housekeeping Products and Cosmetics & Toiletries leading the growth (+27.4 and +25.6 respectively), with Food and Drink following closely behind. The FMCG categories together with Domestic appliances represent the top five categories for growth both in value and as a percentage change.

The world’s top FMCG manufacturers, Procter & Gamble and Unilever, were the world’s leading spenders on advertising in Q1.