No banking on ads in this economy
Financial services cut spending 10% in first three quartersNEW YORK -- The financial crisis is taking its toll on the advertising industry.
One of the nation's largest ad sectors, financial services, cut spending 10% in the first three quarters of 2008 to $5.3 billion, the Nielsen Co. said.
A sharp decline in ads from mortgage services and loan companies led the way, each dropping more than 60% year-over-year in the first three quarters. JPMorgan Chase cut ad spending 18% to $211 million in the period, while Citigroup spending dropped $27% and Capital One Financial spending fell 21%. Bank of America, the third-biggest ad spender among financial services companies, cuts its spending by 30%. Visa, the second-biggest advertiser in the category, was unchanged. Most of the spending goes toward TV buys.
There were a few bright spots. Investment companies and their Web units hiked spending 6% compared with the same period a year ago. Financial/investment services were the top category among financial services this year and last year, with $1.19 billion in 2007 and $1.23 billion so far in 2008. Investment Web sites, which are broken out as a separate category, were up 16%.
The woes in the financial services industry are a double blow to the advertising economy, which already is reeling from cutbacks among domestic automakers that have, along with packaged goods companies, made up the biggest spenders funding TV. Automotive ad spending has been down for 12 consecutive quarters.