A preliminary tally of 2009 ad spending in the United States reveals a 9 percent decline -a drop that demands re-evaluation of old media choices.

Based on findings through the third quarter of 2009 by The Nielsen Company -the same business that collects and compiles TV ratings- I suggested the recession and decline in ad spending should motivate ad buyers to re-exam some long-held concepts about where best to spend their shrinking ad budgets and how they could benefit from redirecting a portion of their spending towards digital signage advertising.

Last month, Nielsen released its preliminary figures for all of 2009. They reveal an overall 9 percent reduction in advertising spending, or a decline of $11.6 billion from the 2008 total of $117 billion. With the fourth quarter of 2009 accounted for, the decline becomes the sixth consecutive quarterly drop in ad spending, albeit at a pace that has slowed for the past few quarters.

The latest figures also show that for the 10 categories where ad spending is the greatest outlays for advertising declined 9.5 percent in 2009 compared to the previous year. According to The Nielsen Company statistics, the top 10 ad categories and spending in each were:

Product Category - Jan-Dec 2009 - Jan-Dec 2008 - % Change
($ millions)

Automotive------- $8,039.1 -- $10,491. -- (-)23.4%

Pharmaceutical -- $4,504.6 -- $4,424.6 -- 1.8%

QSR Restaurant -- $4,068.5 -- $4,014.9 -- 1.3%

Department Stores-$4,066.3 -- $3,956.0 -- 2.8%

Wireless Phone----$3,386.2 -- $3,689.0 -- (-)8.2%

Motion Picture----$3,368.4 -- $3,414.0 -- (-)1.3%

Auto Dealerships--$3,227.2 -- $4,188.6 -- (-)23.0%

Direct Response---$2,465.9.-- $2,582.9 -- (-)4.5%

Restaurants-------$1,557.6 -- $1,615.0 -- (-)3.6%

Furniture Stores--$1,437.5 -- $1,553.1 -- (-)7.4%

Total Top 10------$36,121.2 - $39,930.5 - (-)9.5%


The Nielsen figures show both car categories -the "automotive" category representing factories and dealer associations and the auto dealership category- saw the greatest decline. That's not surprising given the high degree of apprehension among many U.S. workers, who have themselves lost jobs, taken a temp job to make ends meet, or seen friends and family furloughed and laid off. Understandably, there is a reluctance to commit to years of car payments while job anxieties are running high for millions of workers.

In this environment, perhaps the marketing executives at car companies and dealerships would do well to reconsider their advertising strategy. Rather than focusing almost entirely on getting people to walk into their showrooms through TV, radio and newspaper ads, they may be better served by reallocating a portion of their existing ad budgets to communicate via digital signage with the people who already come in on a daily basis to have their vehicles serviced.

While traditional advertising is important, I contend it's equally important to communicate directly with existing customers who have a track record of supporting the dealership or brand and are ready to spend money. Digital signage is an effective tool to accomplish this on-premise messaging because it can speak right to the needs of people in the dealership and at the same time exploit the persuasive elements of video, audio, graphics, animation and text that are the staples of television. The same could be said for most of top 10 ad categories that experienced declines in 2009.

To be clear, I am not advocating any advertiser drop traditional media. They serve an important function. However, what I am suggesting is those controlling advertising budgets give serious consideration to how they allocate their dollars. Ignoring how advertising via digital signage can benefit an enterprise simply because it doesn't' fit neatly into a pre-existing media category with a long history is unwise.

A far smarter approach is to re-evaluate existing media budgets and open one's self to new opportunities. A serious appraisal will reveal digital signage is a worthy and effective ad candidate.

With the grip of the recession easing, research firm iSuppli projects strong digital signage growth in retail and indoor applications; a nontraditional source of ad revenue could give both a boost.

Last week, research firm iSuppli came out with a forecast of LCD and plasma display shipments for digital signage applications this year, and panel shipments for indoor venues and retail signage look to see dramatic growth.

The El Segundo, CA, based research firm is predicting the number of LCD and plasma signs for use in entertainment facilities, hospitality centers, healthcare facilities, auditoriums and indoor arenas -collectively described as "indoor venues" by iSuppli- will reach 720,000 units this year -up more than 70 percent from the 419,000 shipped for indoor venue use in 2009.

LCD and plasma displays for retail signage also will enjoy significant growth this year, says iSuppli. Displays used in grocery stores, shopping malls and fast-food restaurants, will climb 18 percent from the 2009 level to 848,000 units. That's an increase of some 131,000 from last year.

According to Sanju Khatri, principal analyst for signage and public information displays, "renewed economic vigor after the recession" is responsible for the strong growth forecasted. More panels mean more touch points with consumers, and advertisers looking to capture their share of consumer spending as economic activity picks up will renew their commitment to digital signage, which was growing before the wheels came off the economy.

While there are plenty of traditional advertisers -from apparel to produce, soft drinks to pharmaceuticals- who've had a taste of digital signage ads and want more, there may be a source of ad revenue with a history of spending millions upon millions of dollars on ads that probably has never even considered digital signage advertising. However, cashing in with this advertiser will require a little out-of-the-box thinking on the part of both the ad buyer and ad seller.

On Jan. 21, the U.S. Supreme Court in a 5-4 split decision said it was a violation of the First Amendment to limit the amount of money corporations and unions spend on political advertising. I do not intend to argue in favor or against the court's decision in the space. Rather, I wish to point out a fairly obvious, but easily overlooked, fact: with the bans lifted, the tide of corporate and union money spent on political ads in 2010 is highly likely to rise in a significant way. Both as well as the candidate receiving their financial support will be able to spend without restriction.

As they do, they're likely to continue to rely on their mainstay media: radio, television, newspaper and direct mail. But without a spending cap, they may also be receptive to new advertising media like digital signage. After all, Internet advertising on political ads -a relative newcomer in terms of the storied history of campaign ads- has experienced steady growth.

A look back at the last off-year election cycle in 2006 reveals about $2 billion dollars were spent on political advertising. With several political pundits predicting the 2010 campaign could result in a change in control for one if not both chambers of Congress, political ad spending this year is likely to be far higher.

To be sure, politicians, corporations and unions have a well-established track record of seeking out the greatest number of eyeballs for their ads. So, it won't be surprising if local and network TV continue to dominate ad buys. But consider this: digital signage can offer politicians, corporations and unions with specific, highly tailored messages an effective means to reach a desired constituency just as it offers advertisers promoting a particular piece of merchandise a targeted way to communicate with a specific audience.

For instance, digital signage might offer organizations backing candidates who support the Second Amendment a way to reach gun owners via signage hanging in a sporting goods store, gun shop or discount retailer. Or, a car company wishing to back a candidate who opposes stricter fuel efficiency standards might run ads on signs in car dealership service waiting areas or car parts stores. The possibilities are seemingly endless.

As LCD and plasma displays dedicated to digital signage applications are forecasted to grow in a dramatic fashion this year, the gift of an unexpected, potentially significant new ad revenue source may help make achieving the break-even point of putting the signs in place occur long before otherwise would have been reasonable to expect.