US Advertising Expenditures Show 2006 Increase

Steven Fredericks, president and CEO of TNS, said: “Total advertising expenditures continue to expand slowly. Excluding the cyclical contributions from special events such as political elections and the Olympics, core growth is tracking in the range of 3%.”

“In the near-term, we foresee no significant changes to underlying fundamentals that would move the overall ad market onto a different track. Our most recent forecast of 2.6% growth for 2007, while conservative, still seems appropriate.”

Internet display advertising registered a 17.3% increase to $9.76 billion as marketers continued to shift budgets towards targeted, digital media.

Spot TV, boosted by record-setting levels of political advertising, was up 10.4% for 2006 to $17.23 billion. In the fourth quarter, which contained the last five weeks leading up to election day, spot TV expenditures jumped 20.7%.

Network TV finished 2006 with $22.88 billion in expenditures, an improvement of just 2.5% against 2005. Cable Network ad spending rose 3.4% to $16.75 billion.

Radio experienced a fourth quarter uptick and moved into positive growth territory for the year with $11.05 billion in spending, a rise of 0.3 percent. Softening ad page counts for Consumer Magazines trimmed revenue growth to 4.6%, at $23.19 billion for 2006. Local Newspapers saw expenditures for their print editions drop 3.3% to $24.06 billion.

A recent forecast from Jack Myers Media Business Report predicted that total US advertising spending in 2007 will grow 3.7% (see US Adspend Forecast To Increase 3.7% In 2007).

The top 10 advertisers of 2006 spent a combined $18.73 billion, a reduction of 2.8% versus the prior year period as robust gains from leading telecommunications companies failed to offset automotive category cutbacks.

Across the top 50 companies, which are a more diversified group of marketers, expenditures were down 1.5%. Beyond the top 50, a segment that accounts for approximately two thirds of the ad market, spending grew 6.9% during 2006.

Although its fourth quarter spending rate eased, Telecommunications was the top spending category in 2006 at $9.43 billion, finishing at a gain of 10.3%. Nearly half of the sector increase was attributable to AT&T.

The highest growth rate among the top 10 categories was registered by Pharmaceuticals which jumped 13.8% to $5.29 billion.

EMarketer recently released a report which forecast that US 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).

In the fourth quarter of 2006, an average hour of monitored prime time network programming contained 5 minutes, 10 seconds of in-show brand appearances and 18:11 of commercial messages.

The combined total of 23:21 of marketing content represents 39% of a prime time hour. Unscripted reality programming had an average of 8:55 per hour of brand appearances as compared to just 2:34 per hour for scripted programs such as sitcoms and dramas.

Late night network talk shows had even higher levels, averaging 10:17 per hour. The combined load of Brand Appearances and paid ad messages in these shows approached 33 minutes per hour, or 55% of total content time.