The post-election bounce arrived in January, not the weeks immediately following the vote. Guideline’s U.S. Ad Market Tracker says the ad market grew 7.4% in January compared with a year earlier. It was the best-ever January since Guideline launched the monthly tracking index in 2013. The figures are in line with what some radio executives say they saw in their billings for the start of the year.
“We had thought and hoped [the bounce] would be expressed in December. It wasn’t, and I think there’s an argument that it was expressed in January,” iHeartMedia CEO Bob Pittman said last week on his company’s quarterly earnings call.
Even with the bump, some trendlines are hard to break. Guideline data shows the usual slowdown in the marketplace between the end of the fourth quarter and the holiday spending frenzy and the start of the first quarter. Ad activity fell 29% between December and January, Guideline says.
The report shows digital ad growth led the way in January across the total ad market, increasing 15.8% year-to-year. That helped make up for the 4% decline in traditional media ad spending. Yet even with the drip, traditional media accounted for a larger share of spending. Guideline says it accounted for 38% of spending during January, up from a 31% share in December. Digital’s share dipped seven points to 62%, although its share was up compared with a year earlier.
Working in radio’s favor is that growth in spending has been primarily coming from smaller advertising categories in recent months, according to Guideline. Those categories could be more open to spending on something other than the preferred go-to of network television of major ad categories like automotive, CPG, and retail. While the gap was narrower between the two segments compared to the past several months, the latest data shows the top 10 ad category spending increased 7.2% year-to-year last month, while categories beyond the top 10 increased total ad spending by 7.8% in January vs. a year earlier.
Pittman said last week that he’s seen some ad buyers “take a little bit of a step back” during February as they assessed the impact of tariffs and the stubborn rate of inflation, but reminded investors that first-quarter spending is notoriously fickle. “If there’s ever a quarter in which advertisers feel confident and comfortable stepping back a little bit, it’s first quarter,” he said. “It’s the one that there’s least pressure to advertise. But hopefully what we’re seeing is a return to some comfort and stability.”
Guideline’s U.S. Ad Market Tracker is a composite monthly index from Standard Media Index, designed to provide a real-world measure of U.S. ad spending, based on actual invoiced media buys — including radio — from the major agencies and their clients. As such, it is mostly representative of spending by larger national advertisers.
The data is powered by Standard Media Index (SMI) and covers radio, television, digital, print, and out-of-home media types. It is based on actual spending data from the SMI pool partners at major holding companies and large ad agencies, representing 95% of all U.S. national brand ad spending.
See Guideline’s U.S. Ad Market Tracker HERE.