Ad Track: Listless ad spending expected to worsen

— -- July was a cruel month for the advertising and media industries.

Ad spending for the first half of the year was sluggish, and based on a slew of indicators last month, folks had better suck in their guts: The belt-tightening has more notches to go.

"The weather conditions are dreary and worsening," says BMO Capital Markets analyst Leland Westerfield. In July, Westerfield, along with several other ad prognosticators, ratcheted down their spending forecasts for how 2008 will finish.

The auto industry is "retrenching" on ad spending, and "the outlook for retail, financial and telecommunications advertising is negative for the second half of the year," Westerfield says.

Robert Coen, director of forecasting at Interpublic Group's Magna unit, downgraded his 2008 U.S. ad-spending estimate to 2% growth, from 3.7% at the start of the year. He sees no recovery soon. "It'll be 2010 before you see any real improvement overall," he says.

Signs of trouble in July:

•Carmakers tap brakes on spending:On its second-quarter earnings call, Ford said it slashed advertising and sales promotions spending to $100 million, vs. $300 million for the same period in 2007. Faced with a dismal market, cash-strapped automakers won't be loosening the purse strings anytime soon.

"We're in a tough industry right now … most of the players in the automotive space are cutting back" ad budgets, says Mark LaNeve, GM's North America sales and marketing chief.

Among GM ad cutbacks: fewer sponsorships and less truck advertising. The money left will focus on GM's "fuel-efficient cars and crossovers," LaNeve says.

Those cuts hurt: GM was the No. 4 U.S. ad spender in 2007, shelling out $2.1 billion, reports TNS Media Intelligence. Ford was the sixth, with $1.6 billion.

•Big spenders lose marketing chiefs:The nation's top two ad buyers — Procter & Gamble and AT&T — revealed major marketing executive shifts in July. Longtime P&G Global Marketing Officer Jim Stengel stepped down, while AT&T's advertising head, Wendy Clark, said she's leaving the company.