- Ad spending continued its decline for the fifth consecutive month, down 3% year-over-year for the month of October, according to Standard Media Index’s October 2022 Core Data report.
- With $8.5 billion in spending for the month, October outperformed all other months so far in 2022. Digital ad spend grew 5%.
- Further suggesting some general economic strength, four category groups — pharma, restaurants, apparel & accessories and travel — experienced their best October for ad spending since 2017.
SMI’s findings for October provide some optimism for advertising industry. While five straight months of ad spending declines are nothing to cheer about, the fact that those declines are slowing, particularly heading into the holiday season, does offer some silver lining.
The ad sector is also still normalizing after a particularly robust year. For the last quarter of 2021 and into the first two months of 2022, ad spending was up 20% over 2020 spending, significantly higher than the general 2-5% market growth that had been in place for decades, SMI’s numbers indicate. In fact, October 2022 is up 6% compared with October 2020.
Among media channels, linear TV and digital search continued to lag over the previous years in October, down 15% and 16%, respectively. Digital media, however, expanded, gaining 5%, and representing 57% of overall ad dollars spent in October. Out-of-home also grew rapidly, led by increased investment from the entertainment & media, apparel & accessories, and auto sectors. Surprisingly, newspaper investment also expanded, breaking four consecutive years of divestment in the category.
In addition to strong October results for pharma, restaurants, apparel & accessories and travel, the automotive and CPG categories also increased their ad spending. The remaining six categories — technology, entertainment & media, financial services, general business, retail, and wellness — all showed year-over-year declines. Technology took the largest hit, with investment down nearly $400 million compared to the same period a year prior.
With the decline in linear TV and digital search, ad revenues for the largest media companies were also off. The drop in digital search led Google’s ad revenue to decline for the first time on record. Meanwhile Paramount, Comcast, Disney and Fox also showed double-digital year-over-year percentage declines in ad revenue.