Global advertising spend up 5.7% in Q2 2011

nAsia Pacific most robust region; flat growth for Western Europe in Q2
nFMCG ad spend shows signs of slowing in Europe and North America, while advertising for clothing and accessories increases in Asia Pacific

Despite overall growth of 5.7 per cent for the advertising industry in Q2 2011, ad spending fell in nearly half the world’s key markets in the second quarter of this year as economic concerns continued to impact the advertising industry, according to Nielsen’s quarterly Global AdView Pulse report released last week.
Nielsen reported that advertising revenue dropped in Q2 in 16 out of 36 global markets – the first significant decline since the Q3 2009 report when ad spend fell in more than half the markets monitored at the height of the global recession.
“Compared to the 8.9 per cent growth rate in the first quarter of the year, there was definitely some slowdown,” observed Randall Beard, Global Head of Advertiser Solutions for Nielsen. “But, based on the global economy and the financial problems many countries have experienced, a 5.7 per cent increase for quarterly year-on-year global ad spend is still great news.”
Global advertising in Q2 totalled US$ 127 billion (mainly based on published rate cards and four major media types), and the first half of 2011 closed with a +7.2 per cent growth over the same period in 2010.
Declines in ad spending for the fast moving consumer goods (FMCG) category in Europe and North America, and the continued decline of newspaper ads, also contributed to slower growth in these regions. However, in the USA, the world’s largest ad market, these declines were off-set by increases in the automotive, insurance and financial service categories, which contributed to 3.1 percent overall growth in both the US and North America as a whole.
FMCG advertising posted its lowest quarterly growth since the Q1 2009 Pulse report: four per cent globally with notable declines of -3.6 per cent in Europe and -3.0 per cent in North America. The decline in FMCG ad spend was particularly surprising as the Easter holiday, traditionally a key occasion for FMCG and confectionary advertising in Europe and North America, took place in late April this year, which should have pushed more ad revenue to the beginning of Q2, noted Beard.
Within FMCG, cosmetics and toiletries posted the most robust growth of 6.9 per cent and accounted for nearly one in every 10 dollars spent globally.
Interestingly, clothing and accessories, which was among the worst hit recession categories in 2009, posted the highest quarterly year-on-year increase in Q2 – up 17.9 per cent globally, driven by hefty 27.9 per cent increase in Asia Pacific, with a +39.8 per cent increase in China.
In Western Europe, quarterly ad spend flat-lined with -0.3 per cent growth and seven out of 12 European markets reported quarterly declines. Ad spend in Germany, Europe’s largest economy, reported an increase of 3.1 per cent in Q2.
Asia Pacific posted the strongest regional growth in Q2 (+9.3%) with double-digit increases from Indonesia (18.9%), China (14.8%), Hong Kong (13.4%) and the Philippines (12.6%).
Among 36 global markets covered by the Nielsen Global AdView Pulse, Argentina reported the highest year-on-year quarterly increase of 28.5 per cent.
Globally, hardest hits markets in Q2 were Egypt (-51.7% YOY) where advertisers remained cautious amid the uncertain political and economic climate following the Arab Spring. Other double-digit declines were reported in Turkey (-12.9%), Taiwan (-11%) as well as Southern European markets of Spain (-12.6%) and Greece (-13.7%).
While radio posted the most robust percentage increase among all traditional media in Q2 (+8.2 percent), overall television continued to dominate global advertising and increased its share of voice and spend.
In the first half of 2011, television ads attracted US$ 65 out of every US$ 100 spent on advertising globally, up from US$ 63.70 one year ago. “According to Nielsen, overall TV viewership continues to grow,” said Beard. “In the US, TV viewing increased 22 minutes per month per person over last year. So the medium remains the dominant source of video content for all demographics.”
Nielsen Holdings N.V. is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands.