US Adspend Decreases In First Quarter Of 2007
US advertising expenditure decreased 0.3% to $34.93 billion in the first quarter of 2007, according to new figures from TNS Media Intelligence.
“We must also recognise that 2007 first quarter results are adversely affected by comparisons against last year’s Winter Olympics. However, after factoring out the incremental contribution of special events, it is apparent that core growth rates have slowed further from last year’s lacklustre levels.”
Only six of the 19 measured media registered year-over-year gains in the first quarter. Internet display advertising posted a 16.7% increase to $2.70 billion, as marketers continued to expand their online programs.
Consumer magazines advanced 7.1% to $5.17 billion on the strength of higher rate card pricing and a modest uptick in page counts. Cable network expenditures were up 6.3% to $3.82 billion, with niche interest channels pacing ahead.
Broadcast TV comparisons were adversely affected by the absence of the biennial Olympic Games event. Network TV ad spending tumbled 7.2% to $6.05 billion while spot TV expenditures slipped 4.1% to $3.74 billion.
Newspaper and radio media continued to significantly lag the overall market. Expenditures for local newspapers fell 4.6% to $5.39 billion on persistently weak demand from the auto, telecom and real estate categories. Radio spending declined 2.1% to $2.29 billion.
| Advertising Spending By Media: Q1 2007 v Q1 2006 (1) | |||
| Media | Jan-Mar 2007 (Millions) | Jan-Mar 2006 (Millions) | % Change |
| Television Media | $15,590.1 | $16,020.6 | -2.7% |
| Network TV (2) | $6,052.5 | $3,593.4 | -7.2% |
| Cable TV | $3,821.1 | $3,593.4 | 6.3% |
| Spot TV (3) | $3,744.2 | $3,905.3 | -4.1% |
| Spanish Language TV | $985.5 | $950.2 | 3.7% |
| Syndication – National | $986.8 | $1,048.6 | -5.9% |
| Magazine Media (4) | $6,669.8 | $6,417.7 | 4.4% |
| Consumer Magazines | $5,167.5 | $4,825.2 | 7.1% |
| B-To-B Magazines | $957.0 | $1,009.1 | -5.2% |
| Sunday Magazines | $429.7 | $438.5 | -2.0% |
| Local Magazines | $109.9 | $113.7 | -3.3% |
| Spanish Language Magazines | $35.6 | $31.2 | 14.3% |
| Newspaper Media | $6,282.6 | $6,589.8 | -4.7% |
| Newspapers (Local) | $5,389.2 | $5,649.7 | 4.6% |
| National Newspapers | $810.0 | $855.1 | -5.3% |
| Spanish Language Newspapers | $83.4 | $85.0 | -1.9% |
| Internet (5) | $2,704.8 | $2317.7 | 16.7% |
| Radio Media | $2,293.6 | $2,343.2 | -2.1% |
| Local Radio (6) | $1,580.0 | $1,588.2 | -0.5% |
| National Spot Radio | $503.0 | $538.1 | -6.5% |
| Network Radio | $210.5 | $216.9 | -2.9% |
| Outdoor | $882.2 | $861.3 | 2.4% |
| FSIs (7) | $474.6 | $475.2 | 0.0% |
| Total (8) | $34,927.6 | $35,025.5 | -0.3% |
| Source: TNS Media Intelligence | |||
| 1. Figures are based on the TNS Media Intelligence Stradegy multimedia ad expenditure database across all TNS MI measured media, including: Network TV; Spot TV; Cable TV (44 networks); Syndication TV; Hispanic Network TV; Consumer Magazines (223 publications); Sunday Magazines (6 publications); Local Magazines (29 publications); Hispanic Magazines (32 publications); Business-to Business Magazines (413 publications); Local Newspapers (145 publications); National Newspapers (3 publications); Hispanic Newspapers (55 publications); Network Radio; Spot Radio; Local Radio; Internet; and Outdoor. Figures do not include public service announcement (PSA) data. | |||
| 2. Network TV figures include the CW and MyTV networks, both of which launched in Sept 2006 | |||
| 3. Spot TV figures do not include Hispanic Spot TV data | |||
| 4. Magazine media includes Publishers Information Bureau (PIB) data | |||
| 5. Internet figures do not include paid search advertising | |||
| 6. Local Radio includes expenditures for 34 markets in the US | |||
| 7. FSI data represents distribution costs only | |||
| 8.The sum of the individual media may differ from the sub-totals or grand total due to rounding | |||
While total ad expenditures declined by 0.3%, there was unusually wide variation around this average from individual media types. As a direct result, changes in share of spending by media type were more pronounced than normal. Internet display advertising surged to 7.7% of total expenditures, up from 6.6% a year ago.
A recent report from eMarketer said that internet ad spending will increase to an average of $88.28 per user this year and will inch close to the $100 per user mark in 2008 (see US Online AdSpend Per User To Increase).
TNS added that magazines gained 0.9 share points and finished the period at 19.2% of ad spending, swapping places in the rankings with Newspapers, which lost 0.8 points. Television lost 1.1 share points but still accounted for 44.6% of all expenditures.
The Top 10 advertising categories in the first quarter of 2007 spent an aggregate $16.74 billion, down 1.1% from a year ago. Financial Services was the top category at $2.11 billion, an increase of 3.1%. Higher budgets from stock brokerages and mutual funds more than offset reductions by credit card companies.
Direct response had the largest percentage gain, up 11.3% to $1.70 billion. The category showed deep strength with higher ad spending levels by a broad range of brands. Restaurants (up 1.5%) and personal care products (up 1.2%) eked out small gains.
Telecommunications category spending dropped 7.6% to $2.10 billion, principally due to lower expenditures from AT&T and Vonage Holdings. Continued weakness in ad spending by local dealers and dealer associations pushed domestic auto down 10.8% to $1.67 billion and non-domestic auto down 4.1% to $1.82 billion. Automotive advertising has now declined for seven consecutive quarters.
Travel & tourism advertising fell 5.0% to $1.25 billion on widespread declines by cruise lines, airlines, hotels and online travel reservation services.
At the start of the year, TNS Media Intelligence said that total US advertising spending is expected to increase 2.6% in 2007, to $153.7 billion (see US Adspend To Grow To 2.6% In 2007).