TNS: U.S. ad spend declined 14.7% Q1-Q3

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Total measured ad expenditures in the first nine months of 2009 dropped by 14.7% as compared to the same period in 2008, according to data released today by TNS Media Intelligence. Ad spend during Q3 was down 15.3% versus last year, the sixth consecutive quarter of YOY declines.


“The updated monthly trend line on total advertising expenditures still shows no meaningful improvement through October,” said Jon Swallen, SVP Research at TNS Media Intelligence. “The slump has now passed its first anniversary and year-on-year comparisons will become easier in the upcoming months. Going forward, the timing, strength and durability of an advertising recovery will ultimately be determined by the way consumer activity rebounds.”

Internet display (+7.0%) and FSIs (+3.9%) were the only media types with spending increases for the nine month period. Online growth was propelled by telecom, travel and auto advertisers. FSIs benefitted from CPG companies expanding their couponing efforts as consumers became more value-conscious.

Among Television media, Cable TV networks continued to translate audience gains into a larger share of ad revenue. Year-to-date Cable TV expenditures slipped by just 2.9%, a much stronger performance than the TV sector as a whole. Network TV, now faced with comparisons against the 2008 Summer Olympics bonanza, saw year-to-date spending fall 11.5% and Q3 spending tumble 25.1%. Spot TV expenditures (-27.5%) remained depressed due to persistent weakness in auto and retail activity as well as cyclical reductions in political advertising.

Magazines (-19.7%), Newspapers (-22.8%) and Radio (-22.8%) severely lagged the overall ad market during the January-September period. Third quarter losses for each of these broad media groupings were less severe compared to the first half of the year and this could be construed as a positive indicator. However, these media are also into their second year of steep declines so Q3 comparisons are against the relatively low levels of year-ago spending.

Overall, local media ad spending was down 23.7% through September while national media dropped 10.1%.

 

Percent Change in Measured Ad Spending:

Jan-Sept 2009 vs. Jan-Sept 20081

     

MEDIA SECTOR

  • Media Type

(Sectors and types listed in rank order of spending)

  % CHANGE
TELEVISION MEDIA   -12.1%
  • Network TV
  -11.5%
  • Cable TV2
  -2.9%
  • Spot TV 3
  -27.5%
  • Syndication – National
  -2.8%
  • Spanish Language TV4
  -10.4%
MAGAZINE MEDIA5   -19.7%
  • Consumer Magazines
  -18.7%
  • B-to-B Magazines
  -27.6%
  • Sunday Magazines
  -16.4%
  • Local Magazines
  -25.8%
  • Spanish Language Magazines
  -24.9%
NEWSPAPER MEDIA6   -22.8%
  • Newspapers (Local)
  -22.7%
  • National Newspapers
  -24.6%
  • Spanish Language Newspapers
  -18.0%
INTERNET (display ads only)   7.0%
RADIO MEDIA   -22.8%
  • Local Radio7
  -23.3%
  • National Spot Radio
  -27.2%
  • Network Radio
  -9.1%
OUTDOOR   -16.2%
FSIs8   3.9%
TOTAL   -14.7%
     

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 (122 DMAs); Cable TV (71 networks); Syndication TV; Hispanic Network TV (4 networks); Consumer Magazines (231 publications); Sunday Magazines (7 publications); Local Magazines (22 publications); Hispanic Magazines (14 publications); Business-to-Business Magazines (278 publications); Local Newspapers (143 publications); National Newspapers (3 publications); Hispanic Newspapers (47 publications); Network Radio (5 networks); National Spot Radio; Local Radio (32 markets); Internet; and Outdoor. Figures do not include public service announcement (PSA) data.
2. Cable TV figures do not include Hispanic cable networks
3. Spot TV figures do not include Hispanic stations
4. Spanish Language TV includes 4 Hispanic broadcast networks, 4 Hispanic cable networks and 71 local Hispanic TV stations.
5. Magazine media includes Publishers Information Bureau (PIB) data and reflect print editions of publications.
6. Newspaper media figures reflect print editions of publications.
7. Local Radio includes expenditures for 32 markets in the U.S.
8. FSI data represents distribution costs only.

Ad Spending by Advertiser
The top 10 advertisers in the first nine months of 2009 spent a combined total of $11,757.6 million, a 5.9% decrease from last year. Across the top 100 companies, a more diversified group of marketers representing almost one-half of total ad expenditures, spending fell by 7.9%. Among the top 100 companies, 67 reduced their ad budgets and only 33 increased spending.

Procter & Gamble was the largest advertiser with $1,941.1 million in expenditures for the January-September period, a 15.9% decline versus a year ago.

Wireless telecom providers occupied three of the top ten positions and took different paths to arrive there. Verizon Communications spent $1,692.1 million, down 5.8% from last year. AT&T spent $1,339.4 million, 6.1% less than a year ago. Both advertisers cut Q3 ad expenditures by over 20% and this erased their spending increases from the first half of the year. Sprint Nextel, after slashing ad budgets in 2008, continued its aggressive marketing efforts and spent $912.8 million, a gain of 51.1% and the largest rate of increase among the top ten companies.

Pfizer was the only other top advertiser to raise its spending, finishing the period at $896.6 million, up 11.9%. While the acquisition of Wyeth helped pushed Pfizer into the top tier, the spending gains were primarily attributable to its own portfolio of prescription drugs, particularly Lipitor and Caduet.

General Motors was the lone automotive advertiser to make the top ten list, even as it reduced media budgets by 15.5% during the first nine months, to $1,352.6 million. Emerging from bankruptcy in July, GM quickly ramped up marketing activities and hiked its Q3 expenditures by 4.2%. 
           

Top Ten Advertisers: Jan-Sep 2009 vs. Jan-Sep 20081

                 
Rank   Company  

Jan-Sep 2009

(Millions)

 

Jan-Sep 2008

(Millions)

 

%

Change

1   Procter & Gamble Co   $ 1,941.1   $ 2,307.6   -15.9 %
2   Verizon Communications Inc   $ 1,692.1   $ 1,796.0   -5.8 %
3   General Motors Corp   $ 1,352.6   $ 1,599.9   -15.5 %
4   AT&T Inc   $ 1,339.4   $ 1,426.5   -6.1 %
5   Johnson & Johnson   $ 1,037.0   $ 1,050.5   -1.3 %
6   News Corp   $ 947.8   $ 1,046.5   -9.4 %
7   Sprint Nextel Corp   $ 912.8   $ 603.9   51.1 %
8   Pfizer Inc   $ 896.6   $ 801.0   11.9 %
9   Time Warner Inc   $ 874.5   $ 979.6   -10.7 %
10   General Electric Co   $ 763.6   $ 876.8   -12.9 %
    TOTAL2   $ 11,757.6   $ 12,488.3   -5.9 %
                       

Source: TNS Media Intelligence
1. Figures do not include FSI, House Ads or PSA activity
2. The sum of the individual companies may differ from the Total shown due to rounding

Ad Spending by Category
The top ten advertising categories in January-September 2009 spent a total of $50,952.3 million, down 14.1% from a year ago. Automotive was the leading category at $7,491.9 million, a drop of 30.8% and proportionately in line with the decline in new vehicle sales. Dealer spending fell more severely than manufacturers. Automotive expenditures have now declined for seventeen consecutive quarters.

Ongoing competition among wireless phone companies and TV service providers propped up Telecom spending, which finished the period at $6,190.3 million, a gain of 0.4%. The only other leading category with an increase was Pharmaceuticals, up 0.6% to $3,483.6 million.

Financial services advertising plunged 23.7% to $5,673.1 million, the largest rate of decline among the top ten. Online stock brokerages and investment advisors, chasing a rising stock market, showed some tentative signs of an advertising revival in the third quarter. However, retail banks and credit card companies continued to be extremely cautious with their marketing budgets.

Local advertising categories continued to sputter as seen in the results for Local Services and Amusements (down 15.0%, to $5,609.9 million) and Miscellaneous Retail (off 17.4%, to $4,751.0 million). The latter includes all retail segments except department stores (where spending fell just 5.1%) and home furnishing/building supply stores (down 20.4%).

Top Ten Advertising Categories: Jan-Sep 2009 vs. Jan-Sep 20081

                 
Rank   Category  

Jan-Sep 2009

(Millions)

 

Jan-Sep 2008

(Millions)

 

%

Change

1   Automotive   $ 7,491.9     $ 10,825.8     -30.8 %
   
  • (Manufacturers)
    ($4,781.1 )     ($6,083.1 )   (-21.4 %)
   
  • (Dealers)
   

($2,710.8

)     ($4,742.7 )   (-42.8 %)
2   Telecom   $ 6,190.3     $ 6,168.6     0.4 %
3   Financial Services   $ 5,673.1     $ 7,439.1     -23.7 %
4   Local Services & Amusements   $ 5,609.9     $ 6,599.4     -15.0 %
5   Direct Response   $ 4,916.2     $ 5,586.5     -12.0 %
6   Miscellaneous Retail2   $ 4,751.0     $ 5,748.5     -17.4 %
7   Food & Candy   $ 4,549.9     $ 4,653.8     -2.2 %
8   Restaurants   $ 4,204.8     $ 4,309.1     -2.4 %
9   Personal Care Products   $ 4,081.5     $ 4,495.0     -9.2 %
10   Pharmaceuticals   $ 3,483.6     $ 3,462.7     0.6 %
    TOTAL3   $ 50,952.3     $ 59,288.5     -14.1 %
                           

Source: TNS Media Intelligence
1. Figures do not include FSI or PSA activity.
2. Miscellaneous Retail does not include these retail segments: Department Stores, Home Furnishing/Building Supply Stores
3. The sum of the individual categories may differ from the total due to rounding.

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 Q3, an average hour of monitored prime time network programming contained 11 minutes, 46 seconds (11:46) of in-show Brand Appearances, a 31% increase from a year ago. In addition, there was 14:07 per hour of network commercial messages. The combined total of 25:53 of marketing content represents 43% of a prime-time hour.

Unscripted reality programming had an average of 15:04 per hour of Brand Appearances as compared to just 5:33 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows averaged 11:18 per hour. The combined load of Brand Appearances and network ad messages in these programs reached 26:23 per hour, or 44% of total programming time.