Summary:

Driven down by big fourth-quarter declines in digital advertising, the total U.S. ad market grew only 0.8 percent for all of 2011, a report…

Ad Spending Growth

Driven down by big fourth-quarter declines in digital advertising, the total U.S. ad market grew only 0.8 percent for all of 2011, a report released Monday by research firm Kantar Media said.

According to Kantar, which is owned by global ad-agency conglomerate WPP, the fourth quarter of 2011 was the worst three-month period for U.S. advertising growth in two years. In fact, since growing 8.7 percent in the third quarter of 2010, ad revenue growth has decreased every month since, actually declining in the fourth quarter by 1 percent (see chart).

With traditional sectors like broadcast TV up 7.7 percent in the fourth quarter and cable up 2.4 percent, digital sectors were singled out by Kantar for stymieing growth of the overall market. Paid search, for example, fell 6.4 percent in the fourth quarter, and 2.8 percent for all of 2011, with financial, insurance and local service providers investing fewer dollars.

Meanwhile, internet display advertising decreased 5.9 percent in Q4, dragged down by smaller budgets from auto manufacturers, telecom providers and travel companies. For the entire year, display increased 5.5 percent.

Kantar attributes the decline in digital revenues to the migration of dollars into less mature markets like mobile.

“Some mature digital media formats were touched by the year-end tide of reduced spending. Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly towards emerging and unmeasured digital platforms bears watching as 2012 unfolds,” said Jon Swallen, senior VP of research for Kantar Media Intelligence North America.

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