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Global ad spend rebounds in Q1: Nielsen

MUMBAI: For 18 consecutive months, it has been a tough call with advertisers tightening their belts. The climate now seems to be improving. According to a recent study, global ad spend at rate-card values in the first quarter of 2010 increased by 12.5 per cent year-on-year totaling $110 billion, boosting the hopes of the global ad industry including India which posted a 34 per cent jump.


All regions posted positive growth in the quarter, with Latin America driving the biggest increase, up 48 per cent in ad spend compared to the first quarter of 2009, according to the latest Global AdView Pulse report from Nielsen.
 
 
Brazil, Mexico and Argentina posted the highest ad spend year-on-year increases in the first quarter (55 per cent, 43 per cent and 35 per cent respectively), followed by India (34 per cent) and Hong Kong (24 per cent).
Ad spend in the US, the world’s largest ad market, increased by four per cent year-on-year.


Nielsen deputy MD Michele Strazzera says, "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. 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 the first quarter. The Winter Olympics in and the run-up to the World Cup also provided a boost to global ad spend in the first quarter, but it is expected that the year will close flat or slightly positive in real terms.


Regionally, ad spend increased by 13 per cent in Asia Pacific.
 
 
“The growth of advertising is closely following the path of the post-recession boom. That said, it’s important to put these impressive growth numbers into context. The first quarter spend overall represent a more contained 16 per cent increase versus the pre-crisis 2008 numbers,” added Strazzera.


Globally, television attracted the largest share of advertising, up 16 per cent in the first quarter compared to the previous year. TV ad spend posted double-digit increases in every region. 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 per cent and nine per cent growth respectively. Meanwhile, magazine advertising remained flat on a global basis.
 
 
“Though still negative, this is the best quarterly result registered for magazines since the second quarter of 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 per cent 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 the first quarter of 2010 (23 per cent) while automotive (19 per cent), financial services (17 per cent) and durables (16 per cent) rebounded in every region.


Within the FMCG sector, all categories posted growth of more than 20 per cent increases with Housekeeping Products and Cosmetics and Toiletries leading the growth (27.4 per cent and 25.6 per cent respectively), while Food and Drink followed 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 and Gamble and Unilever, were the world’s leading spenders on advertising in the first quarter.

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