US ad spend increased 2.6% in Q1

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Total ad spend in the quarter increased 2.6% from a year ago and finished the period at $32.9 billion, according to data released by Kantar Media. The gain compared to flat spending in the second half of 2011.


“After a sluggish start in January, the pace of measured ad spending quickly accelerated and grew at an average rate of more than 4% during February and March, the best performance in more than a year,” said Jon Swallen, Chief Research Officer at Kantar Media North America. “Early figures from the second quarter indicate continued modest growth with improvement trickling down to media that have been lagging the overall advertising market.”

Ad spend increased across every television media type in the first quarter of 2012. Sports programming was the engine behind year-over-year gains of 7.4 % in Cable TV and 7.0 % in Network TV spending. More than two-thirds of this dollar volume growth came from sporting events, led by the NCAA Men’s Basketball Tournament and NFL post-season games. Comps were helped by a calendar timing shift that moved ad money for the NCAA Final Four games out of April and into the very last day of Q1 2012.

Radio ad spend was up 8%, with Local Radio down -1.9% and National Spot Radio down -3.5%.
Network Radio made up the difference, rising 22.9% in Q1.

Syndication TV budgets rose 15.7 % and were aided by more hours of programming as well as audience ratings gains. Spot TV, benefitting from a biennial business cycle tied to political advertising and Olympics in even-number years, saw spending increase 2.5 % versus a year ago.

Spanish Language TV expenditures were up 20.7 %, reflecting higher automotive spending and larger allocations from a broad range of consumer packaged goods marketers. Other Spanish Language media types also posted gains, albeit from much smaller bases. Year-over-year spending in Spanish Language Magazines surged by 26.5 % and Spanish Language Newspapers increased 4.7%.

Outside the Hispanic market, print media continued to lose ground. Expenditures in Consumer Magazines dropped 4.2 % from a year ago and budgets in Sunday Magazines were off 4.6 % due to cutbacks from auto manufacturers, food companies and prescription drug marketers. Local Newspaper ad spending fell 3.9% and National Newspapers declined by 7.7%, each hurt by substantial reductions from the financial service, travel and telecom categories. The losses in Newspaper spending were consistent with reductions in the amount of space sold.

Within the universe of 2,811 Internet sites that Kantar Media measured for at least a full year, display expenditures fell 4.1% during Q1. The overall spending reduction was primarily attributable to fewer display ads appearing on the average web page, with some offset from higher average CPMs. There was also a sharp split between popular, high-traffic sites, where spending was close to flat year-over-year, and the many small, long-tail sites, which saw an aggregate percentage decline in the mid-teens.

Outdoor advertising rose 4.6%, the eighth consecutive quarter of year-over-year increases. Higher spending from core categories including Local Services, Retail and Restaurants were a prime catalyst. Outdoor investments rose 4.6%, the eighth consecutive quarter of year-over-year increases. Higher spending from core categories including Local Services, Retail and Restaurants were a prime catalyst.

Percent Change in Measured Ad Spending1
MEDIA SECTOR• Media Type(Sectors and types listed in rank order of spending) Jan – Mar2012 vs. 2011
TELEVISION MEDIA 7.6%
• Network TV 7.0%
• Cable TV2 7.4%
• Spot TV3 2.5%
• Syndication – National 15.7%
• Spanish Language TV4 20.7%
MAGAZINE MEDIA5 -3.6%
• Consumer Magazines -4.2%
• B-to-B Magazines -1.0%
• Sunday Magazines -4.6%
• Local Magazines 5.8%
• Spanish Language Magazines 26.5%
NEWSPAPER MEDIA6 -4.3%
• Local Newspapers -3.9%
• National Newspapers -7.7%
• Spanish Language Newspapers 4.7%
INTERNET (Display Ads Only) -4.1%
RADIO MEDIA 0.8%
• Local Radio7 -1.9%
• National Spot Radio -3.5%
• Network Radio 22.9%
OUTDOOR 4.6%
FSIs8 3.0%
TOTAL 2.6%

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 (125 DMAs); Cable TV (total of 75 networks); Syndication TV; Hispanic Network TV (4 networks); Consumer Magazines (200 publications);Sunday Magazines (8 publications); Local Magazines (30 publications); Hispanic Magazines (18 publications); Business-to-Business Magazines (352 publications); Local Newspapers (133 publications); National Newspapers (3 publications); Hispanic Newspapers (46 publications); Network Radio (6 networks); National Spot Radio (205 markets); Local Radio (33 markets); Internet Display (2,811 sites monitored at least one year); and Outdoor. Figures do not include public service announcements (PSA) or house advertising
2. Cable TV figures based on 71 English language networks and do not include any Hispanic cable networks
3. Spot TV figures based on 659 English language stations in 125 DMAs and do not include any Hispanic stations.
4. Spanish Language TV includes 4 Hispanic broadcast networks, 4 Hispanic cable network and 72 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 data is provided by Miler Kaplan Arase
8. FSI data represents distribution costs only

Measured Ad Spending By Advertiser

Spending among the ten largest advertisers in the opening quarter of 2012 was $3,922.3 million, a 5.5% decline 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 climbed 3.4%.

Procter & Gamble was the top-ranked advertiser with spending of $685.0 million, down 4.7%. The decline comes against the backdrop of a Q1 announcement by P&G that it plans to tighten the reins on marketing budgets and shift more money out of traditional media.

Comcast was the second largest spender during the period with outlays of $482.7 million, an increase of 4.3% that was propelled by the ongoing rollout of its Xfinity service. In contrast, media expenditures at rival telecom companies fell sharply. AT&T slashed its spending by 31.6%, to $388.9 million, as the company deferred budgets to support an upcoming marketing push timed to the Summer Olympics. Verizon Communications trimmed its expenditures by 9.2% to $358.6 million.

Only two automotive advertisers landed in the Top Ten. General Motors reduced spending by 17.8% to $403.3 million, the seventh consecutive quarterly decline for the automaker. Toyota Motor spent $327.8 million, an increase of 8.6%.

News Corp registered the largest percent gain among the Top Ten as budgets jumped 24.9% to $357.5 million. Time Warner also had a healthy gain as its quarterly spending reached $301.5 million, up 9.0%. Results for both companies were shaped by their movie studio divisions.

Top Ten Advertisers of Q1 20121
Rank Company Jan-Mar 2012
($ Millions)
Jan-Mar 2011
($ Millions)
% Change
1 Procter & Gamble Co $685.0 $719.0 -4.7%
2 Comcast Corp $482.7 $462.9 4.3%
3 General Motors Corp $403.3 $490.7 -17.8%
4 AT&T Inc $388.9 $568.4 -31.6%
5 Verizon Communications Inc $358.6 $395.0 -9.2%
6 News Corp $357.5 $286.2 24.9%
7 Toyota Motor Corp $327.8 $302.0 8.6%
8 L’Oreal Sa $316.4 $291.5 8.5%
9 Time Warner Inc $301.5 $276.7 9.0%
10 Pfizer Inc $300.6 $357.6 -15.9%
TOTAL2 $3,922.3 $4,149.8 -5.5%
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 3.1% in Q1 2012 to $20.73 billion.

Automotive was the top category with $3,528.9 million of spending, down 1.5 percent. Manufacturer budgets contracted by 6.9% primarily because there were fewer marketing launches in 2012 to provide impetus for higher budget levels. Dealer spending remained robust with a gain of 8.7% amidst a strong retail sales climate.

Retail was the second largest category by dollar volume with media investments of $3,373.5 million, up 8.6%. The department store segment was especially strong, spurred by a significant repositioning campaign from JC Penney which in turn prompted most rival brands to increase their own budgets.

(Note: The definition of “Retail” has changed from prior reports, It was previously split into three segments for reporting. It is now being reported as a combined aggregate.)

Financial Services posted the highest rate of growth among the Top Ten categories, a 10.1%  increase to $2,120.6 million. Fierce competition among credit card issuers, revitalized marketing programs for retirement planning services and higher budgets from tax preparation firms were the growth drivers.

Expenditures for Personal Care Products rose 4.8% to $1,476.6 million and the Restaurant category boosted its spending by 3.7%  to $1,523.0 million.

Telecom advertising remained soft during the quarter and finished 2.8% lower at $2,102.6 million. Sharp budget reductions from wireless carriers were only partially offset by increases from TV service providers and mobile device manufacturers.

Top Ten Advertising Categories of Q1 20121
Rank Category Jan-Mar 2012
($ Millions)
Jan-Mar 2011
($ Millions)
% Change
1 Automotive $3,528.9 $3,582.4 -1.5%
(Manufacturers) $2,185.3 $2,346.8 -6.9%
(Dealers) $1,343.6 $1,235.7 8.7%
2 Retail $3,373.5 $3,107.8 8.6%
3 Local Services $2,190.7 $2,037.9 7.5%
4 Financial Services $2,120.6 $1,925.8 10.1%
5 Telecom $2,102.6 $2,162.8 -2.8%
6 Food & Candy $1,676.8 $1,665.3 0.7%
7 Direct Response $1,549.1 $1,574.8 -1.6%
8 Restaurants $1,523.0 $1,469.1 3.7%
9 Personal Care Products $1,476.6 $1,408.9 4.8%
10 Insurance $1,184.8 $1,174.7 0.9%
TOTAL2 $20,726.7 $20,109.6 3.1%
Source: Kantar Media
1. Figures do not include FSI or PSA activity
2. The sum of the individual categories can differ from the total shown due to rounding

Top Spending Advertisers Within Select Media

The ten largest Network TV advertisers spent $1,277.5 million on the medium during the quarter, up 4.4% from a year ago.

Top Ten Network Television Advertisers of Q1 20121
Rank Company Jan-Mar 2012
($Millions)
% Change
vs. Year
Ago
1 AT&T Inc $179.1 -23.2%
2 General Motors Corp $171.7 -5.8%
3 Ford Motor Co $159.4 7.5%
4 Verizon Communications Inc $141.6 4.3%
5 Procter & Gamble Co $136.3 6.2%
6 Anheuser-Busch InBev $106.8 25.7%
7 Time Warner Inc $98.9 0.2%
8 Yum Brands Inc $98.4 31.6%
9 Apple Computer Inc $93.0 42.5%
10 Kraft Foods Inc $92.5 28.6%
TOTAL2 $1,277.5 4.4%
Source: Kantar Media
1. Figures do not include PSA activity
2. The sum of the individual companies can differ from the total shown due to rounding

The ten largest Cable TV advertisers invested a total of $861.5 million in the medium during Q1, up 1.8% from a year ago. Only four of these companies were also top ten Network TV advertisers.

Top Ten Cable TV Advertisers of Q1 20121
Rank Company Jan-Mar 2012
($Millions)
% Change
vs. Year Ago
1 Procter & Gamble Co $162.3 -17.7%
2 General Motors Corp $94.6 13.7%
3 AT&T Inc $82.6 -11.2%
4 General Mills Inc $81.6 7.5%
5 Allstate Corp $79.8 62.0%
6 Guthy-Renker Corp $77.5 7.2%
7 Yum Brands Inc $76.3 12.7%
8 Nutrisystem Inc $70.1 25.3%
9 Berkshire Hathaway Inc $68.8 0.3%
10 Comcast Corp $68.0 -18.7%
TOTAL2 $861.5 1.8%
Source: Kantar Media
1. Figures do not include PSA advertising
2. The sum of the individual companies can differ from the total shown due to rounding

The top ten internet display advertisers of Q1 2012 invested $464.8 million in the medium, an increase of 13.7 percent. Telecom and financial service companies dominate the list.

Top Ten Internet Display Advertisers of Q1 20121
Rank Company Jan-Mar 2012
($Millions)
% Change
vs. Year Ago
1 Comcast Corp $87.1 95.4%
2 Experian Group LTD $83.3 8.4%
3 Verizon Communications Inc $51.7 -43.7%
4 Sprint Nextel Corp $38.2 28.5%
5 Toyota Motor Corp $36.1 -12.1%
6 E-Trade Financial Corp $34.7 0.5%
7 Netflix Inc $34.3 45.8%
8 Procter & Gamble Co $33.5 -24.3%
9 Bank Of America Corp $33.4 125.8%
10 TD Ameritrade Holding Corp $32.5 336.9%
TOTAL2 $464.8 13.7%
Source: Kantar Media
1. Figures are based on sites that have been monitored for at least one year
2. The sum of the individual companies can differ from the total shown due to rounding