Copy of Report: Ad Market More Resilient Than U.S. Economy.
Last week, the Commerce Department released new figures showing the U.S. Gross Domestic Product tumbled 9.5% during second quarter 2020 for the worst economic contraction on record. On an annualized basis, GDP fell at a rate of 32.9%. But the advertising market, while down harshly, appears to be outpacing the U.S. economy.
The U.S. ad economy contracted only 27.4% during the second quarter and 1.4% during the first quarter of the year, according to an analysis based on the U.S. Ad Market Tracker, a collaboration of SMI and MediaPost that indexes market growth monthly.
Based on first half averages, the U.S. economy contracted 19.0%, while the ad economy declined 14.4%, MediaPost says, suggesting the ad economy so far appears more resilient.
MediaPost notes that the U.S. ad industry has traditionally lagged going into and coming out of U.S. recessions. That’s likely because some types of advertising involve long-term agreements and because there are often gaps between economic activity and ad budgeting by big marketers.
“However, in recent history marketers have moved their media buying and planning cycles much closer to ‘just-in-time’ decision-making and commitments,” writes MediaPost Editor In Chief Joe Mandese.
As a caveat to it story, MediaPost points out that the U.S. ad index it developed with SMI tilts toward the big advertisers who work with the major ad agency holding companies and may not be representative of long-tail advertising from small- and medium-sized businesses.
However Facebook said its advertiser base is now up to 9 million with total business accounts growing to 180 million, up from 140 million in fourth quarter 2019. “Facebook's top 100 advertisers now make up just 16% of total revenue, which is less than last year," BMO Capital Markets analyst Daniel Salmon wrote in a report to investors, suggesting that Facebook is performing well, while even more dependent on smaller advertisers.