U.S. ad spend increased 7.1% in Q3


Total ad expenditures in Q3 finished the period at $34.5 billion, according to  Kantar Media data. Total spend for the first nine months of the year grew 3.8% to $101.3 billion.

“Political campaigns and the Summer Olympics delivered their expected bonanza in the third quarter, adding roughly $1.8 billion of incremental spending to the marketplace,” said Jon Swallen, Chief Research Officer at Kantar Media North America. “Looking beyond these special events and focusing on indicators of core health, our data show that more than 60% of the Top 1000 advertisers increased their budgets year-over-year. This proportion has been stable for several quarters and indicates marketers are holding the course.”

The Summer Olympics and political advertising dominated the ad market in the third quarter of 2012. Television media were the prime beneficiaries. Network TV expenditures rose 29.9%, with the London Games generating approximately $1 billion of incremental money for the sector. Spot TV spending surged 19.8% as the expected flood of money from political candidates, parties and groups rolled in.

Spanish Language TV budgets increased 17.8%, aided by the combination of higher sell-out levels at key national networks and political category spending on local stations. Syndication TV expenditures jumped 9.3% on strong growth from consumer package goods, insurance and restaurant marketers. Cable TV expenditures grew by just 2.9%, a slower rate of growth than previous quarters, reflecting the diversion of some TV advertising budgets to the Olympics.

There were some gains beyond the television sector. Network Radio spending rose 26.3% in Q3 but comparisons were inflated by the addition of more radio programming to Kantar Media’s monitoring. Expenditures in National Spot Radio were 9.4% higher with about one-half of the net dollar volume growth attributable to the political category.

FSI budgets increased 17.3% and were helped by the unusual timing of a 13-week quarter that had 14 Sundays, a prime day for the distribution of printed coupons. Outdoor media expenditures grew 4.9% on the tailwinds of higher spending from local retail and service businesses.

Internet Display advertising fell 4.3% in the third quarter. Spending totals, which do not include either video or mobile ad formats, were dragged down by weaker results from mid-size web sites.

Print media continued to lag the overall ad market. Expenditures in National Newspapers tumbled 17.2% on commensurate reductions in the amount of space sold. Consumer Magazines fell 3.2% as weaker spending from pharmaceutical and direct response marketers negated gains from the apparel and food categories.

Local Newspaper revenues increased 0.8% solely due to having an extra Sunday in the reporting quarter. Without this bonus, expenditures would have dropped by roughly 3% which is in line with recent quarterly results. The additional Sunday also helped Sunday Magazines limit its year-over-year decline to just 1.8%.

Percent Change in Measured Ad Spending1
MEDIA SECTOR— Media Type(Sectors and types listed in rank order of spending) July-Sept2012 vs. 2011 Jan-Sept
2012 vs. 2011
— Cable TV2 2.9% 5.0%
— Network TV 29.9% 10.6%
— Spot TV3 19.8% 9.4%
— Spanish Language TV4 17.8% 18.6%
— Syndication – National 9.3% 11.6%
MAGAZINE MEDIA5 -2.9% -3.0%
— Consumer Magazines -3.2% -3.2%
— B-to-B Magazines -4.2% -2.5%
— Sunday Magazines -1.8% -4.7%
— Local Magazines 3.5% 3.0%
— Spanish Language Magazines 20.8% 16.5%
NEWSPAPER MEDIA6 -1.5% -2.9%
— Local Newspapers 0.8% -1.6%
— National Newspapers -17.2% -11.8%
— Spanish Language Newspapers 5.2% 2.4%
INTERNET (Display Ads Only) 7 -4.3% -3.1%
RADIO MEDIA 4.2% 2.4%
— Local Radio 8 -1.3% -0.8%
— National Spot Radio 9.4% 1.3%
— Network Radio 26.3% 23.1%
OUTDOOR 4.9% 4.0%
FSIs9 17.3% 7.0%
TOTAL 7.1% 3.8%

Source: Kantar Media

1. Figures are based on the Kantar Media Stradegy™ multimedia ad expenditure database across all measured media, including: Network TV (5 networks); Spot TV (732 stations in 125 DMAs); Cable TV (76 networks); Syndication TV; Hispanic Network TV (4 networks); Consumer Magazines (197 publications); Business-to-Business Magazines (337 publications); Sunday Magazines (8 publications); Local Magazines (30 publications); Hispanic Magazines (16 publications); Internet display (2,878 sites monitored at least one year); Local Newspapers (133 publications); National Newspapers (3 publications); Hispanic Newspapers (47 publications); Local Radio (33 markets); Network Radio (6 networks); National Spot Radio (205 markets); and Outdoor. Figures do not include public service announcements (PSA) or house advertising
2. Cable TV figures based on 72 English language networks and do not include any Hispanic cable networks
3. Spot TV figures based on 659 English language stations and do not include any Hispanic stations
4. Spanish Language TV includes 4 Hispanic broadcast networks, 4 Hispanic cable networks and 73 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. Internet expenditures reflect display advertising only. Video ad formats and mobile ad formats are specifically excluded.
8. Local Radio reflects expenditures for 33 markets in the U.S. and the data are provided by Miller, Kaplan, Arase & Co.
9. FSI data represents distribution costs only

Ad Spending By Advertiser

Spending among the ten largest advertisers in the second quarter of 2012 was $3,977.4 million, an 8.4% increase compared to a year ago. Among the Top 100 marketers, a diversified group accounting for more than two-fifths of all measured ad expenditures, budgets rose 11.7%. Seventy of the Top 100 marketers had a TV advertising presence in the Summer Olympics and these budgets were a major driver behind the robust increase.

Procter & Gamble was the top-ranked advertiser in the period, with measured spending of $770.9 million, an increase of 4.7%. The largest growth rate among the Top Ten was registered by Toyota Motor which spent $319.9 million, up 41.8% compared to a year ago, when operations were still curtailed by the Japanese tsunami and earthquake. Expenditures at rival automaker General Motors reached $471.8 million, up 24.6%, and were spurred by marketing launches from the Cadillac division.

Berkshire Hathaway cracked the Top Ten rankings by spending $347.2 million, up 26.6%. A major sponsorship position in the Summer Olympics fueled the increase. Media budgets at Comcast rose 5.8% to $418.2 million on stronger marketing support for its cable and telephony services.

Ad expenditures for the two largest wireless service providers continued to drift downward. AT&T expenditures fell 5.8%, to $384.3 million, and Verizon Communications reduced its media budget by 12.4%, to $344.9 million.

Top Ten Advertisers:July-September 20121
Rank Company July-Sept 2012
($ Millions)
July-Sept 2011
($ Millions)
1 Procter & Gamble Co $770.9 $736.3 4.7%
2 General Motors Corp $471.8 $378.6 24.6%
3 Comcast Corp $418.2 $395.2 5.8%
4 AT&T Inc $384.3 $407.9 -5.8%
5 Berkshire Hathaway Inc $347.2 $274.3 26.6%
6 Verizon Communications Inc $344.9 $393.7 -12.4%
7 L’Oreal Sa $343.7 $319.0 7.7%
8 Toyota Motor Corp $319.9 $225.6 41.8%
9 News Corp $303.8 $265.5 14.4%
10 General Mills Inc $272.7 $274.2 -0.6%
TOTAL2 $3,977.4 $3,670.4 8.4%

Source: Kantar Media

1. Figures do not include FSI, House Ads or PSA activity
2. The sum of the individual companies can differ from the total shown due to rounding

Measured Ad Spending By Category

Expenditures for the ten largest categories grew 8.4 percent in the third quarter of 2012 to $21,906.3 million. Retail was the top category with expenditures of $3,930.1 million, up 8.1 percent versus a year ago. The growth was distributed across a broad cross-section of marketers.

Automotive was the second largest category by dollar volume, with media spending of $3,820.3 million – a 20.7% increase. Manufacturer ad budgets rose 21.9 percent and dealers spent 19.1 percent more as the sales climate for new vehicles remained vigorous.

Q3 expenditures for Telecom were up 9.9% to $2,151.2 million. Category performance was divided with lower spending from the top wireless companies offset by increased investments from their smaller rivals plus the ongoing marketing battles among TV service providers.

Spending from the Restaurant category was $1,612.4 million, an increase of 12.1%, while Food & Candy expenditures rose 9.2% to $1,729.6 million. Summer Olympics investments contributed to the growth in each category.

Ad spending in the Financial Services category remained soft during Q3, dropping 2.3% to $1,872.2 million. Reduced budgets for credit cards and retail banking more than offset higher expenditures for investment products and financial planning services.

Top Ten Advertising Categories:July-September 20121
Rank Category July-Sept 2012
($ Millions)
July-Sept 2011
($ Millions)
1 Retail $3,930.1 $3,636.3 8.1%
2 Automotive $3,820.3 $3,164.8 20.7%
— (Manufacturers) ($2,206.1) ($1,809.7) (21.9%)
— (Dealers) ($1,614.3) ($1,355.1) (19.1%)
3 Local Services $2,359.1 $2,274.1 3.7%
4 Telecom $2,151.2 $1,956.6 9.9%
5 Financial Services $1,872.2 $1,916.4 -2.3%
6 Food & Candy $1,729.6 $1,583.3 9.2%
7 Personal Care Products $1,627.1 $1,532.4 6.2%
8 Direct Response $1,613.0 $1,507.1 7.0%
9 Restaurants $1,612.4 $1,438.5 12.1%
10 Insurance $1,191.2 $1,192.4 -0.1%
TOTAL2 $21,906.3 $20,201.9 8.4%