P&G cuts adspend by £16m as TV market suffers

by Daniel Farey-Jones, Brand Republic 14-Oct-08, 09:30

LONDON - Procter & Gamble cut its advertising budget for June to August by £16.1m year on year according to research indicating the TV ad market is suffering as a range of clients slash spend.

The research from Billetts Media Monitoring fills out the general picture provided by two reports yesterday.

The quarterly Bellwether report with data on individual client budgets revealed a record number of downward revisions to budgets and a prediction by Credit Suisse First Boston that the TV ad market will drop between 8% and 10% in the fourth quarter, and that 2009 will be 5% down on 2008.

Procter & Gamble, which was the UK's biggest advertiser in 2007 with a spend of £202.6m on brands such as Gillette and Pringles, made the biggest individual cut to its June-August spend, reducing it by £16.1m on last year.

Aviva, the insurer, lopped off £10.3m from its spend while BT cut £8.1m and Royal Bank of Scotland, which is facing majority government ownership and attempting to sell its insurance divisions, cut £5.9m.

Total advertising spend in the June to August quarter was down by 1%, according to Billetts.

The "government and utilities" sector cut its spend by the most, 19%, followed by finance with an 11% cut. However, six sectors increased their spend, led by pharmaceuticals with a 7% rise.

According to the Financial Times broadcasters have borne the brunt of the cuts with total TV ad revenues falling 16.8% in September to £286m, and Billetts is expecting falls of 6.8% in October, 9.1% in November and 6.4% in December.

Nick Manning, the chief operating officer of Billetts' parent company Ebiquity, told the Financial Times that TV ad pricing was now the same level it was in 1992.

Ebiquity was formerly known as Thomson Intermedia.