According to ad tracking firm TNS Media Intelligence, the nation’s 50 biggest advertisers cut their spending on “measured” media such as TV, print and Internet display ads by 1.5% in 2006 — though U.S. ad spending grew 4.1% overall. While some of the decline may reflect cutbacks in spending, it likely signals that big companies such as Procter & Gamble, Johnson & Johnson and General Motors are reallocating some of their ad budgets to new Internet ad venues which aren’t measured by TNS — such as paid-search advertising, social networking and online video. At the 4As media conference, P&G CMO Jim Stengel told the audience the marketers must make a major “mindset shift,” rather than simply trying to keep pace with changes in technology, if clients and agencies are to flourish in the rapidly changing world of digital commerce
According to a story in AdAge, Johnson & Johnson is shifting larger parts of its 2007 marketing budget from traditional media to digital media. J&J’s measured-media spending plunged $250 million, or 22 percent, in the U.S. last year – pretty much in line with a forecast that the consumer-products giant would move 20 percent of its marketing budget into unmeasured media, such as search and other direct marketing. Much of the cut occurred in J&J’s national TV budget — which accounts for 60% of the company’s total ad spending. For the second year in a row, it has announced that it will sit out the TV upfront.
Overall, J&J reported global ad spending fell around 10% to $1.9 billion last year, even as sales rose 6%. But their US measured-media spending fell twice that fast, suggesting a big portion of its marketing budget went to unmeasured media.
J&J is also putting some money to a centrally controlled innovation fund that its brands can tap by using nontraditional media.