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2015: One very robust year for advertising

Spending is up 7 percent for the full year and 17 percent in fourth quarter

By Bill Cromwell

January 26, 2016

washingtonpostsign advertisingAny growth in advertising from one year to the next is always a good thing, even if it’s up just a couple of percentage points. Slow growth has become the norm in recent years as more ad dollars shift to cheaper media, notably digital.

So by those standards 2015 looks to have been one boffo year for American advertising.

Total ad spending was up 7 percent, according to Standard Media Index, with really strong growth in the fourth quarter, up 17 percent.

The big gainer, no surprise, was digital, up 26 percent for the year and 35 percent in fourth quarter.

But also up–and here’s a huge surprise–were newspapers, according to SMI data, gained from tracking ad spending on the part of 80 percent of U.S. agencies.

The newspaper industry’s problems are well documented, and we’ve come to expect an 8 to 10 percent decline in newspaper advertising each year.

But SMI reports that in 2015 newspaper spending, including print and digital dollars, rose 7 percent, including a robust 14 percent jump in fourth quarter, with several key ad categories pouring more dollars in as the year progressed.

“The immediacy of newspapers and their increasing success in digitizing their product is really starting to pay off and is a trend we have seen slowly building throughout 2015,” James Fennessy, SMI’s chief commercial officer, tells Media Life.

This is, of course, just one take on ad dollars. Many other analysts and ad tracking firms believe newspapers are continuing to see declines and don’t foresee that changing anytime soon.

Borrell Associates, which tracks local ad spending, is forecasting 2016 newspaper spending will be down 4.6 percent.

Still, it’s interesting to imagine that there could be a glimmer of hope for a recovery for newspapers based on this one source.

Newspapers’ big strength has long been the ability to drive sales, getting people off their couches and into stores with their wallets out. A major reason people buy newspapers is for local shopping.

And since most papers are still delivered each day, advertisers can get a campaign in front of people in almost no time, unlike other traditional options such as magazines or out of home, which take more time to plan the creative and get it into circulation.

Fennessy says several categories in particular drove newspaper ad spending at year’s end, including non-alcoholic beverages, pharmaceuticals and food/produce/dairy, all of which saw at least a 25 percent bump in December.

Other traditional media did not fare as well in 2015. Magazines, radio and two segments of television—broadcast and syndication—all took hits of at least 2 percent.

The aforementioned strong growth for digital continued, with social media seeing the biggest gains of any category, up 71 percent.

And out of home grew 12 percent, including an 18 percent jump in fourth quarter.

Looking ahead to the rest of 2016, Fennessy says ad spending should continue to be brisk. Consumer confidence hit a five-month high in December, and political dollars have begun to kick in.

Plus the Summer Olympics will air on NBCUniversal networks, pumping up to $1 billion in ad sales.

“We see 2016 being a solid year of growth for media,” Fennessy says.

“A strong start to the broadcast year, a big end to the NFL season, significant dollars around political and a Summer Games in our time zone are all positive factors that should see the market deliver mid-single-digit growth over last year.”

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