Total ad expenditures in the opening quarter of 2007 decreased by 0.3% to 34.93 billion as compared to the same period in 2006, according to data released by TNS Media Intelligence.
"After a sluggish January, the pace of advertising expenditures picked up slightly at the end of the quarter," said Steven Fredericks, TNS CEO. "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."
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 comps were adversely affected by the absence of the Olympics. 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. Spend 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.
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.
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 advertisers in Q1 spent a combined total of 4.36 billion, an 8.0% 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%. Beyond the top 50, the segment which has recently been propping up the overall ad market, spending rose just 0.3% during the period.
Procter & Gamble maintained its spot atop the rankings with 722.7 million in spending, down 8.6% 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%) and Walt Disney (down 4.6%).
Among telecom companies, AT&T reduced its advertising budgets by 19.2% to 512 million, reflecting comparisons against a period of inflated spending when AT&T launched a massive re-branding campaign. Verizon hiked expenditures by 5.9% to 459.3 million and Sprint Nextel kept pace with a 7.8% increase to 340.1 million.
GM slipped to the number three spot and finished the period with 480.9 million in spending, a 30.9% decline versus a year ago and the fourth consecutive quarter in which its media budgets fell by at least 25%. At Ford, expenditures rose 3.0% to 421.4 million while Daimler Chrysler increased its spending by 12.7%, to 336.4 million.
The Top 10 advertising categories Q1 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.
DR 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 (+1.5%) and Personal Care Products (+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.