A survey of advertising executives shows an ongoing trend of improved or stable monthly ad spending that began in April but had a modest blip in August.
“Overall, the trend line has been consistent, moving from a ‘deceleration’ – or worsening – of ad spending versus the prior month, bottoming out in July with just 6% of ad executives indicating that it had worsened, although it bumped up to 15% in August,” MediaPost Editor-in-Chief Joe Mandese writes of Pivotal Research Group’s ongoing survey of ad executives.
In April, 46% of ad execs surveyed said their rate of ad spending had worsened from the previous month 31% said there was no change and 23% indicated it was better. By July only 6% said their spending had worsened, 46% indicated “no change” and 42% said it had improved. In August the “no change” group remained about the same while 38% said their spending had improved and 14% said it worsened.
“Generally, the trend has been either toward improved or stable spending,” Mandese says.
Pivotal data from August shows ad demand is growing more for direct response advertising than for brand-focused advertising. Nearly half (44%) of direct response advertisers say their spending has improved, compared to 31% of brand-focused marketers and agencies. Meanwhile, only 12% of direct response advertisers say it has worsened when compared to 16% for brand marketers.
Meanwhile, the U.S. ad marketplace grew 5.9% in August for its first monthly year-over-year expansion since March, when world health officials declared the coronavirus a global pandemic, causing an abrupt pullback in advertising. This finding is based on a MediaPost analysis of Standard Media Index's U.S. Ad Market Tracker, which compiles actual media-buying processed by the major ad agencies and brands.
According to the Ad Market Tracker database, the biggest advertisers represented by the top 10 advertising categories increased their ad spending in August 8.4% over August 2019. During the same period, advertisers in categories 11-plus declined by 3.1%. This trend, MediaPost says, suggests the U.S. ad market rebound is being led by the biggest advertisers.
Yet digital is also contributing to the rebound since smaller brands tend to rely on it more than expensive national media like broadcast and cable network TV. The Ad Market Tracker shows digital ad spending surged 17.9% year-over-year in August while national TV advertising declined 10.8%.
“The data affirm projections of many analysts that the U.S. ad recession would bottom out during the summer and would begin to rebound heading into the fourth quarter,” Mandese says.