Ad spend recedes in June for first decline in 15 months, study says

Dive Brief:

June marked the first month ad spending has decreased this year, breaking a 15-month growth streak, according to Standard Media Index’s latest Core data.
While digital ad spend grew 9% in June compared to the same period last year, linear TV spend receded 19%, a drop most comparable to July 2020 during the height of COVID-19 sports disruptions.
The drop in ad spend could reflect how ongoing pandemic and economic woes are impacting marketers, while the increase in digital media spend likely points to ongoing strength in online activities like shopping, browsing and viewing. Standard Media Index measures activity across TV, OTT, digital, out of home, print and radio.

Dive Insight:

For many marketers, the early days of 2022 were seen as a fresh start following a tough two years. However, historic inflation, the ongoing pandemic and global pressures surrounding the war in Ukraine have proven to limit creative verve.

Still, ad spend has been on a steady growth streak this year, but June marked a turning point with a 3% drop in spend when compared to the same period a year prior, per Standard Media Index findings, which captures 95% of national brand ad spend. The last reported drop was observed in February 2021.

June also marks the first month the majority of product category groups reduced ad spend. Only five sectors saw growth this month, compared to 10 categories in January, February and March. Retail ad spend rose 5%, with discounter stores quadrupling investment year over year, countering declines in other retail subcategories, as consumers scout out deals amid economic turmoil. Travel ad spend is up 62%, signifying the return to travel as pandemic restrictions lifted, coined as “revenge travel.”

Other growth points were across apparel and accessories (41%), general business (2%) and restaurants (0.3%). Two categories newly shifted into decline in June — entertainment & media (-3%) and financial services (-10%).

The channels in which advertisements run seem to be following growing consumer interest in connected TV and digital activations like the metaverse and esports streaming. Digital ad spend in June grew 9% while linear TV receded 19% from the same period last year. Such a steep drop in the channel could be attributed to the shifted NBA playoffs that were moved up one month from June, when it’s normally held, to May. Media companies saw modest growth, with Meta growing 6% (now 72% above June 2020) and Disney growing 4%. Warner Bros. Discovery delivered a 32% increase in digital ad revenue, but was unable to balance declines in linear TV, which fell 39% year over year.

Following June's ad spend declines, Q2 of 2022 as a whole saw slowed growth compared to Q1. Five media types grew in Q1 (Digital, television, OOH, radio and newspapers) compared to only two in Q2, digital (11%) and OOH (37%). Digital media spend represented a 58% share of dollars spent this quarter, with CPG and financial services marketers supporting the largest volumetric ad spend increase. OOH spending brought the fast growth rate.