Pharmaceutical Makers, Travel Firms and Hollywood Have Yet to Restore Cuts to Marketing Budgets

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Recent earning reports from top media companies show U.S. advertising spending is returning with a bang. But not every industry is increasing expenditures, a sign that media and ad companies have some ground to make up before they fully recover.

Industries such as travel, motion pictures and pharmaceuticals have cut ad spending during the first five months of 2010 compared with the year-earlier period, according to Kantar Media, a WPP PLC company that tracks ad spending across TV, print, radio, outdoor and some online.
Ad outlays by travel and tourism companies decreased 9.7% to $1.8 billion during the period while spending by motion picture companies fell 7.5% to $14.7 billion, Kantar says.

A full rebound will take time, says Jon Swallen, Kantar's senior vice president of research.
"It's a two step process," Mr. Swallen says. "Step one is a reversal from declines to increases and the second step for advertisers is to figure out how aggressively do they expand."

Overall, the U.S. ad market is expected to grow 1.1% this year to $149.9 billion, predicts ZenithOptimedia, a media buying firm owned by Publicis Groupe SA.

It has been a quicker-than-expected comeback from one of the advertising world's worst droughts in decades. Ad spending plummeted 12.3% last year, according to Kantar. But the estimated spending for 2011 is still well below the level of 2007, when companies shelled out $177.6 billion on U.S. ads, according to ZenithOptimedia.

Car markers such as General Motors Co., financial services companies and consumer product companies such as Procter & Gamble Co., have helped fuel stronger earnings for media and ad companies by significantly raising their ad expenditures.