TNS Media Intelligence Reports U.S. Advertising Expenditures Decreased 0.3 Percent in First Quarter

TNS Media Intelligence Reports U.S. Advertising Expenditures Decreased 0.3 Percent in First Quarter 2007

New York, NY, June 5, 2007 – Total advertising expenditures in the opening quarter of 2007 decreased by 0.3 percent to $34.93 billion as compared to the same period in 2006, according to data released today by TNS Media Intelligence, the leading provider of strategic advertising and marketing information.

"After a sluggish January, the pace of advertising expenditures picked up slightly at the end of the quarter," said Steven Fredericks, president and CEO of TNS Media Intelligence. "We also must recognize 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 lackluster levels."

Ad Spending By Media
Only six of the 19 measured media registered year-over-year gains in the first quarter. Internet display advertising posted a 16.7 percent increase to $2.70 billion, as marketers continued to expand their online programs. Consumer magazines advanced 7.1 percent 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 percent to $6.05 billion while Spot TV expenditures slipped 4.1 percent to $3.74 billion.

Newspaper and Radio media continued to significantly lag the overall market. Expenditures for Local Newspapers fell 4.6 percent to $5.39 billion on persistently weak demand from the auto, telecom and real estate categories. Radio spending declined 2.1 percent to $2.29 billion.

Advertising Spending by Media:
Q1 2007 vs. Q1 2006 1

 

Ad Spending By Media
Only six of the 19 measured media registered year-over-year gains in the first quarter. Internet display advertising posted a 16.7 percent increase to $2.70 billion, as marketers continued to expand their online programs. Consumer magazines advanced 7.1 percent 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 percent to $6.05 billion while Spot TV expenditures slipped 4.1 percent to $3.74 billion.

Newspaper and Radio media continued to significantly lag the overall market. Expenditures for Local Newspapers fell 4.6 percent to $5.39 billion on persistently weak demand from the auto, telecom and real estate categories. Radio spending declined 2.1 percent to $2.29 billion.

Advertising Spending by Media:
Q1 2007 vs. 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 $6,523.0 -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 $6,699.8 $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 MAG $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 NEWSP $83.4 $85.0 -1.9%
INTERNET 5 $2,704.8 $2,317.7 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 U.S.
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.

Share of Spending By Media
While total ad expenditures declined by 0.3 percent, 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 percent of total expenditures, up from 6.6 percent a year ago. Magazines gained 0.9 share points and finished the period at 19.2 percent 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 percent of all expenditures.

Share of Advertising Spending by Media:
Q1 2007 vs. Q1 2006

MEDIA TYPE JAN-MAR 2007 JAN-MAR 2006
TELEVISION 44.6% 45.7%
MAGAZINES 19.2% 18.3%
NEWSPAPERS 18.0% 18.8%
RADIO 6.6% 6.7%
INTERNET 7.7% 6.6%
ALL OTHER 3.9% 3.9%
TOTAL 100.0% 100.0%
Source: TNS Media Intelligence
Note: The sum of the individual media may differ from total due to rounding

Ad Spending by Advertiser
The top 10 advertisers in the first quarter of 2007 spent a combined total of $4.36 billion, an 8.0 percent reduction from last year as market leaders in key industry segments pared their budgets. Across the top 50 companies, a more diversified group of marketers representing one-third of all ad expenditures, spending fell by 1.4 percent. Beyond the top 50, the segment which has recently been propping up the overall ad market, spending rose just 0.3 percent during the period.

Procter & Gamble maintained its spot atop the rankings with $722.7 million in spending, down 8.6 percent versus a year ago on cutbacks within its portfolio of health and beauty aid products. Lower rates of spending behind theatrical movies contributed to spending declines at Time Warner (down 7.3 percent) and Walt Disney (down 4.6 percent).

Among telecommunication companies, AT&T reduced its advertising budgets by 19.2 percent to $512 million, reflecting comparisons against a period of inflated spending when AT&T launched a massive re-branding campaign. Verizon Communications hiked expenditures by 5.9 percent to $459.3 million and Sprint Nextel kept pace with a 7.8 percent increase to $340.1 million.

General Motors slipped to the number three spot and finished the period with $480.9 million in spending, a 30.9 percent decline versus a year ago and the fourth consecutive quarter in which its media budgets fell by at least 25 percent. At Ford Motor Company, expenditures rose 3.0 percent to $421.4 million while Daimler Chrysler increased its spending by 12.7 percent, to $336.4 million.

Top Ten Advertisers:
Q1 2007 vs. Q1 20061

COMPANY JAN-MAR 2007
(Millions)
JAN-MAR 2006
(Millions)
% CHANGE
PROCTER & GAMBLE CO $722.7 $790.3 -8.6%
AT&T INC $512.20 $634.10 -19.2%
GENERAL MOTORS CORP $480.9 $695.6 -30.9%
VERIZON COMMUNICATIONS INC $459.3 $433.7 5.9%
FORD MOTOR CO $421.4 $409.0 3.0%
TIME WARNER INC $404.3 $436.0 -7.3%
WALT DISNEY CO $341.8 $358.1 -4.6%
SPRINT NEXTEL CORP $340.1 $315.6 7.8%
JOHNSON & JOHNSON $337.8 $365.4 -7.6%
DAIMLERCHRYSLER AG $336.4 $298.4 12.7%
TOTAL $4,356.9 $4,736.2 -8.0%
Source: TNS Media Intelligence
1 Figures do not include Local Radio, FSI, House Ads or PSA activity.

Ad Spending by Category
The Top 10 advertising categories in the first quarter of 2007 spent an aggregate $16.74 billion, down 1.1 percent from a year ago. Financial Services was the top category at $2.11 billion, an increase of 3.1 percent. 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 percent to $1.70 billion. The category showed deep strength with higher ad spending levels by a broad range of brands. Restaurants (+1.5 percent) and Personal Care Products (+1.2 percent) eked out small gains.

Telecommunications category spending dropped 7.6 percent 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 percent to $1.67 billion and Non-Domestic Auto down 4.1 percent to $1.82 billion. Automotive advertising has now declined for seven consecutive quarters.

Travel & Tourism advertising fell 5.0 percent to $1.25 billion on widespread declines by cruise lines, airlines, hotels and online travel reservation services.

Top Ten Advertising Categories:
Q1 2007 vs. Q1 2006

CATEGORY JAN-MAR 2007
(Millions)
JAN-MAR 2006
(Millions)
% CHANGE
FINANCIAL SERVICES $2,108.8 $2,046.2 3.1%
TELECOMMUNICATIONS $2,101.3 $2,274.6 -7.6%
LOCAL SERVICES & AMUSEMENTS $1,837.6 $1,825.7 0.6%
AUTO, NON-DOMESTIC $1,820.9 $1,898.5 -4.1%
MISC RETAIL1 $1,720.5 $1,667.2 3.2%
DIRECT RESPONSE $1,702.9 $1,530.0 11.3%
AUTO, DOMESTIC $1,671.6 $1,874.3 -10.8%
PERSONAL CARE PDTS $1,298.8 $1,282.8 1.2%
TRAVEL & TOURISM $1,253.7 $1,319.6 -5.0%
RESTAURANTS $1,230.7 $1,212.4 1.5%
TOTAL $16,746.7 $16,931.3 -1.1%
Source: TNS Media Intelligence
Note: Figures do not include Local Radio, FSI or PSA activity. The sum of the individual categories may differ from the total due to rounding.
1 Misc Retail does not include these retail segments: Department Stores, Food Stores; Home Furnishing & Appliance Stores

Branded Entertainment
TNS Media Intelligence continuously monitors Branded Entertainment within network prime time and late night programming. The tracking identifies Brand Appearances and measures their duration and attributes. Given the short length of many Brand Appearances, duration is a more relevant metric than a count of occurrences for quantifying and comparing the gross amount of brand activity that viewers are potentially exposed to in the program versus in the commercial breaks.

In the first quarter of 2007, an average hour of monitored prime time network programming contained 6 minutes, 22 seconds (6:22) of in-show Brand Appearances and 16:49 of commercial messages. The combined total of 23:11 of marketing content represents 39 percent of a prime-time hour.

Unscripted reality programming had an average of 10:50 per hour of Brand Appearances as compared to just 4:26 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows had even higher levels, averaging 12:32 per hour. The combined load of Brand Appearances and ad messages in these shows reached 33:30 per hour, or 56 percent of total content time.

Brand Appearances vs. Advertising:
Q1 2007

(minutes:seconds per hour)

  BRAND
APPEARANCES
AD
MESSAGES1
PRIME TIME NETWORK 6:22 16:49
   Unscripted Programs 10:50 17:01
   Scripted Programs 4:26 16:40
     
LATE NITE NETWORK
(Kimmel, Leno, Letterman)
12:32 20:52
Source: TNS Media Intelligence
1 Figures include network and local advertisements, station promotions and PSAs.

About TNS Media Intelligence
Established in 23 countries with more than 16,000 customers, TNS Media Intelligence is part of the TNS Group, ranked #2 worldwide in marketing information. TNS Media Intelligence monitors more than 3 million brands worldwide across a multitude of media, including TV, radio, print, Internet, cinema and outdoor. The company offers a full range of insights and analyses, including the tracking of advertising expenditures and advertising creative, as well as news and social media monitoring and sports sponsorship evaluation.

In the U.S., TNS Media Intelligence is the leading provider of strategic advertising intelligence to advertising agencies, advertisers, and media properties. The company's tracking technologies collect advertising expenditure and occurrence data, as well as select creative executions, for more than 2.8 million brands across 20 media in North America. The U.S. headquarters are in New York City with sales locations in major markets throughout the United States.

www.tns-mi.com

About TNS

TNS is a global market insight and information group.

Our strategic goal is to be recognized as the global leader in delivering value-added information and insights that help our clients to make more effective decisions.

As industry thought leaders, our people deliver innovative thinking and excellent service to global organizations and local clients worldwide. We work in partnership with our clients, meeting their needs for high-quality information, analysis and foresight across our network of over 70 countries.

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TNS is the sixth sense of business.
www.tns-global.com

http://www.tns-mi.com/news/06052007.htm

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