Spending on Digital Ads Fell Sharply in Q4

The digital ad market ended 2011 on a down note, with investments in search and display both falling about 6 percent in the final quarter, according to new data from Kantar Media.

Paid search was down 6.4 percent from the same period in 2010, led by pullbacks from the financial, insurance and local sectors. Display spending dropped 5.9 percent as auto manufacturers, telecom providers and travel companies tightened their belts.

The quarter was a tough one for advertising across the board, dropping by 1 percent from the same period a year ago. While the drop itself wasn’t severe, it was the first quarterly decline since the end of 2009, representing a setback to what many had hoped was the start of a recovery.

TV advertising fared well for the quarter thanks to a strong football season, a seven-game World Series and the premiere of singing competition The X Factor on Fox. Spending on network TV ads for the quarter jumped 7.7 percent year over year.

Magazine spending fell off in the fourth quarter – consumer magazines were down 5.2 percent; Sunday magazines 9.8 percent – as did spending on local newspapers, which was down 3.9 percent.

For the year as a whole, overall Internet spending rose by just .4 percent. Paid search declined 2.8 percent and display fell 5.5 percent.

“The contrast of resilient TV spending and waning budget allocations to other traditional media was plainly evident at the end of 2011,” said Jon Swallen, SVP of research at Kantar Media Intelligence North America. “Some mature digital media formats were also 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.”