U.S. ad spend up 6.5% last year


And advertisers finished the year at $131.1 billion total spend. Q4 was up 7.0% versus last year, propelled by the smaller advertisers outside the Top 1000. TV spend remained strong through the year’s end. Radio’s ad resurgence was tilted in favor of local markets. National spot radio brought in 18.6% more ad dollars vs.  2009 and local radio achieved a 4.9% increase. For both local and national, higher spending was driven by the financial service, media and auto dealer categories.

Spot TV Spend was up 24.2% for the year due to the surge in political advertising, a rebirth in automotive and an increase retail bank advertisers. Spanish Language TV spending rose 10.7%, thanks to the World Cup, among other things. Higher sell out levels helped lift Cable by 9.8% and healthy demand from CPG marketers. Credit card companies pushed Network TV spending ahead by 5.3%, per freshly-released Kantar Media data.

Internet display advertising increased 9.9% compared to the prior year, the second largest growth rate among media sectors. Outdoor advertising was close behind with a gain of 9.6%.

Growth rates for print media trailed the overall ad market. Spend in Consumer Magazines were up a modest 3.3% while National Newspapers rose 2.7%, primarily due to publishing expansion at the Wall Street Journal. Ad spending in Local Newspapers sank 4.6% versus a year ago. Local Newspaper spend has now declined for 21 consecutive quarters.

Spending by advertiser
Spending among the ten largest advertisers in 2010 reached $16,345.8 million, a 3.7% increase compared to last year. Among the Top 100 marketers, a diversified group accounting for close to one-half of all measured ad expenditures, investments climbed 8.8%.

For the eighth consecutive year, Procter & Gamble was the top advertiser with spending of $3,123.9 million, up 17.7% compared to a year ago.

L’Oreal posted the largest rate of increase among the Top Ten with expenditures soaring 30.6% to $1,112.4 million. The company boosted marketing support broadly across its portfolio of mass market and prestige cosmetics brands.

Among auto manufacturers, Ford Motor upped its total ad budgets by 11.1% to $1,132.2 million. Rival General Motors reduced spending slightly, down 1.3% to $2,130.7 million. For both companies, exceptionally high levels of ad support in Q4 2009 timed to the leading edge of the auto sales rebound made for difficult comparisons in Q4 2010 and pulled down the full year growth rates.

AT&T raised expenditures by 12.1%, to $2,092.8 million as it continued to expand marketing efforts for its residential and mobile TV services. Verizon Communications trimmed ad spending 15.2% to $1,823.2 million.

Significant reductions were seen in the ad budgets of Pfizer (down 11.7% to $1,228.7 million) and Johnson & Johnson (down 7.5% to $1,139.7 million).

Ad spend by category
Expenditures for the ten largest advertising categories increased 6.5% and totaled $74,125.1 million. Automotive led the way in both dollar volume and growth rate, finishing out at $13,026.0 million, up 19.8%. Category spending grew almost twice as fast as new vehicle sales (19.8% versus 11.1%), with both manufacturers and dealers spend up significantly. Spend for Personal Care Products were up 11.7% to $6,161.0 million.

Telecom was the second largest category with 2010 budgets rising a modest 4.0% to $8,751.5 million. Lower spending by wireless carriers and satellite TV companies was offset by higher outlays from cable TV service providers.

Package goods advertising remained active at year end as a broad range of manufacturers sought to defend market share against value-priced store brands and generics. The Food & Candy category rose 7.1% to $6,672.3 million.

Ad spend for Financial Services increased 6.0% to $7,689.7 million. In the aftermath of the financial crisis, marketing activity has picked up noticeably for products related to debt (credit cards, consumer loans) while ad budgets for savings related segments have lagged (investments, retail banking).

Only two of the Top Ten categories experienced YOY declines. DR budgets fell by 5.8% to $6,143.5 million. Pharmaceutical spend dropped 8.2% to $4,327.8 million, the lowest dollar amount for this category since 2003.

Branded entertainment
In Q4, an average hour of monitored prime time network programming contained six minutes, fifty seven seconds (6:57) of in-show Brand Appearances and 14:50 of network commercial messages. The combined total of 21:47 of marketing content represents 36% of a prime-time hour.

Unscripted reality programming had an average of 14:19 per hour of Brand Appearances as compared to just 4:50 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows had an average of 10:31 per hour. The combined load of Brand Appearances and network ad messages in these late night shows was 25:22 per hour, or 42% of total content time.

The top five brands ranked by total amount of Brand Appearance time were Chef Revival, Cybex exercise equipment, Yamaha music equipment, Bud Light beer and Asics footwear.