US Ad Spend Rose 5.1% Year On Year
US Advertising spending for the first three quarters of 2006 rose 5.1% over the same period last year, due to ad spending increases across many major media, according to new research from Nielsen Monitor-Plus, the advertising intelligence service of Nielsen Media Research.
Growth in several media remained relatively flat or decreased year over year including smaller spot TV markets, B2B magazines, local newspapers, and spot and network radio.
Jeff King, managing director of Nielsen Monitor-Plus, said: “The recent midterm elections have contributed significantly in increased ad spending in the top 100 television markets, and because all the political ads were local, it led to an uplift in spot TV ad revenues, particularly in the third quarter.”
Online spending increased an impressive 49.2% over the two time periods. “As consumers continue to make the Web a part of their daily media mix, so do advertisers,” said Carolyn Creekmore, senior director of media analytics, Nielsen//NetRatings.
“Some of the segments that represent the largest share of advertising online – including financial services, retail and telecommunications – also experienced the greatest increase in ad spending, year over year.”
Advertising spending for the top 10 companies reached $12.9 billion, up 4.3% from last year. Most major advertisers experienced growth. AT&T and Verizon, both telephone services companies, showed the greatest percent growth in terms of percent, at 47.7% and 24.9%, respectively.
Nielsen Monitor-Plus, says that a portion of this increase is due to merger and acquisition activity. Specifically, since the acquisition of AT&T by SBC Communications, and the re-branding of SBC as AT&T, ad spending has grown significantly this year. Also this year, Verizon completed its purchase of MCI and increased ad spending for the year. In addition, both companies greatly increased their spending in their Internet Service/Web Access business units.
Offsetting these significant increases, two of the three automotive advertisers cut ad spending. Specifically, GM a spending was down 15% and Daimlerchrysler had decreased its ad spend by 3.6%, while Toyota increased spending by 14% over the same period a year ago.
Spending for the 10 largest categories reached $32.1 billion in the first nine months of the year, 3.2% greater than the same period last year.
Most product categories have increased spending, with the exception of Auto Dealerships (-4.6%) and Credit Card Services (-4.3%).
The Wireless Telephone Services industry is the fastest growing in terms of percent increase over last year (12.9%).
The Automotive category (comprised of Factory & Dealer Associations) is still the top spender, reaching almost $10 billion for the first nine months. However, growth was just slightly positive at 1%, due largely to Local Dealership declines of 4.6%.
Nielsen’s product placement tracking service shows significant growth in the integration of product occurrences in primetime broadcast network programming.
The top 10 brands in the product placement category totaled 9,181 occurrences in the first nine months of the year. Coca-Cola soft drinks led the way, with 3,314, more than one-third of total placements, mainly due to occurrences on American Idol.
The top 10 programmes that featured product placements accounted for 19,169 occurrences. American Idol was the number one program, with approximately double the number of product placements than the number two program, Extreme Makeover Home Edition.
A recent report from eMarketer said that total US internet ad spending is estimated to reach $16.4 billion this year, a 30.8% gain over last year’s $12.5 billion (see US Online Adspend Estimated To Grow This Year).