Carmakers help fuel rebound in advertising

The run-up to the World Cup and a strong recovery in marketing by automotive companies helped spur a rebound in global advertising spending in the first quarter of the year, figures from Nielsen show.

Carmakers increased their advertising budgets by 19.1 per cent in the three months to March, according to Nielsen’s Global Adview Pulse report, second only to fast-moving consumer goods groups. Three of the 10 largest advertisers were automotive companies: General Motors , Ford and Toyota. Honda, Volkswagen and Chrysler also appear in the top 20 advertisers over the period, with cars making up 8.2 per cent of total ad spending.

Latin America and Asia-Pacific saw the greatest increases in automotive spending, with Brazil, Mexico, Argentina and India providing the greatest growth in advertising overall. Europe is still lagging the broader recovery.

Consumer goods companies such as Procter & Gamble and Unilever maintained their advertising more than automotives and financial services during the recession. But the recovery in these harder-hit sectors comes in comparison with a very low base last year, and Nielsen only predicts a flat or “slightly positive” outturn in spending over 2010 as a whole.

“It will probably take two years to go back to the previous levels” of ad spend before the recession, said Michele Strazzera, deputy managing director of Nielsen Global Adview. “We will have another very good quarter with quarter two, but then the second part of the year will see less brilliant figures.”

The strong early start to 2010 was driven by the Winter Olympics and the run-up to the World Cup.

Asia-Pacific saw ad spend rise by 13 per cent, with South Africa up 18 per cent even before the football tournament began. China, the third-largest ad market globally, was up 18 per cent. Based on media companies’ rate-card prices for buying TV spots, print pages or other ad formats, global ad spend rose 12.5 per cent in the first quarter of the year, although the actual growth figure is likely fall some way below that level.

Alongside automotive, the healthcare, cosmetics, media and food sectors made up the five largest advertising categories. Financial services comprised 5.5 per cent of spending, although no individual company made the top 20.

Toyota’s presence in the world’s 10 largest advertisers reflects the marketing activity it has undertaken to rebuild trust with consumers after safety fears in the first quarter. A hike in advertising spending from carmakers highlights the resumption of new product launches this year. However, the latest figures from retail car sales in the US, Europe and China suggests slowing demand from consumers as the year has progressed. Television has been the greatest beneficiary of the advertising recovery, up by 9 per cent in North America and by 53 per cent in Latin America.