The outlook for ad spending in 2007 is suddenly looking a lot worse than it did only a couple of weeks ago, judging by first quarter estimates released yesterday by TNS Media Intelligence.
The ad-tracking firm reports that advertisers spent just under $35 billion on all ad-supported media, down 0.3 percent from the same time in 2006. TNS had predicted earlier this year that ad spending in the first half of this year would be up 2.1 percent.
Now even that modest forecast is looking overly upbeat.
While forecasters had predicted the ad market would suffer by comparison with first-quarter 2006, when political campaigns around the country were well underway and when NBC and its affiliates saw a boost from the Winter Olympics, expenditures came in well below expectations.
But more troubling, the flat spending in first quarter has as much to do with the weakening economy as it does comparisons to the year-earlier period, says Jon Swallen, senior vice president of research at TNS.
“Coming into the year, marketers were faced with slowing rates of growth in the general economy, in consumer expenditures and in corporate profits,” he says. “Against this backdrop, marketers seem to have cautiously pulled in the reins on their early-year advertising budgets.”
A number of ad categories and advertisers posted declines from first quarter 2006, including six of the 10 largest advertisers.
The top three spenders, Procter & Gamble, AT&T and General Motors, each slashed spending with GM down the most of any major advertiser, 30.9 percent, to $481 million.
The 10 biggest ad spenders were down 8 percent, to just under $4.4 billion.
The largest ad categories were down 1.1 percent, to $16.7 billion, with telecom, imported auto, domestic auto and travel & tourism each posting declines.
Most media types also suffered declines.
Expenditures on television dipped 2.7 percent from first quarter 2006, to $15.6 billion. Network TV was down 7.2 percent, to just over $6 billion. Spot TV was down 4.1 percent, to $3.7 billion, and syndication was down 5.9 percent, to $987 million.
Cable TV was up 6.3 percent, to $3.8 billion, and Spanish-language TV was up 3.7 percent, to $986 million.
Magazines were up 4.4 percent, to $6.7 billion, including increases for consumer and Spanish-language magazines. Business-to-business publications, Sunday and local magazines each posted declines.
Newspaper spending was down 4.7 percent, to just under $6.3 billion, with local, national and Spanish-language newspapers each suffering declines.
The internet was the fastest-growing medium, up 16.7 percent, to $2.7 billion, surpassing radio as the fourth most-used medium.
Radio was down 2.1 percent, to $2.3 billion. Local radio expenditures were flat while national and network radio posted declines.
Outdoor was up 2.4 percent, to $882 million, and free-standing-insert coupons were flat at $475 million.
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Advertising Spending by Media:
Q1 2007 vs. Q1 2006 1
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MEDIA
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JAN-MAR 2007
(Millions)
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JAN-MAR 2006
(Millions)
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% CHANGE
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TELEVISION MEDIA
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$15,590.1
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$16,020.6
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-2.7%
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· NETWORK TV 2
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$6,052.5
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$6,523.0
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-7.2%
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· CABLE TV
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$3,821.1
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$3,593.4
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6.3%
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· SPOT TV 3
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$3,744.2
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$3,905.3
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-4.1%
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· SPANISH LANGUAGE TV
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$985.5
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$950.2
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3.7%
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· SYNDICATION - NATIONAL
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$986.8
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$1,048.6
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-5.9%
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MAGAZINE MEDIA 4
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$6,699.8
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$6,417.7
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4.4%
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· CONSUMER MAGAZINES
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$5,167.5
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$4,825.2
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7.1%
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· B-TO-B MAGAZINES
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$957.0
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$1,009.1
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-5.2%
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· SUNDAY MAGAZINES
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$429.7
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$438.5
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-2.0%
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· LOCAL MAGAZINES
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$109.9
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$113.7
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-3.3%
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· SPANISH LANGUAGE MAG
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$35.6
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$31.2
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14.3%
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NEWSPAPER MEDIA
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$6,282.6
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$6,589.8
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-4.7%
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· NEWSPAPERS (LOCAL)
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$5,389.2
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$5,649.7
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-4.6%
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· NATIONAL NEWSPAPERS
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$810.0
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$855.1
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-5.3%
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· SPANISH LANGUAGE NEWSP
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$83.4
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$85.0
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-1.9%
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INTERNET 5
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$2,704.8
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$2,317.7
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16.7%
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RADIO MEDIA
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$2,293.6
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$2,343.2
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-2.1%
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· LOCAL RADIO 6
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$1,580.0
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$1,588.2
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-0.5%
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· NATIONAL SPOT RADIO
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$503.0
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$538.1
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-6.5%
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· NETWORK RADIO
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$210.5
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$216.9
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-2.9%
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OUTDOOR
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$882.2
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$861.3
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2.4%
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FSIs 7
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$474.6
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$475.2
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0.0%
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TOTAL 8
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$34,927.6
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$35,025.5
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-0.3%
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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; Cable TV (44 networks); Syndication TV; Hispanic Network TV; Consumer Magazines (223 publications);,Sunday Magazines (6 publications); Local Magazines (29 publications); Hispanic Magazines (32 publications); Business-to-Business Magazines (413 publications); Local Newspapers (145 publications); National Newspapers (3 publications); Hispanic Newspapers (55 publications); Network Radio; Spot Radio; Local Radio; Internet; and Outdoor. Figures do not include public service announcement (PSA) data.
2. Network TV figures include the CW and MyTV networks, both of which launched in Sept 2006.
3. Spot TV figures do not include Hispanic Spot TV data.
4. Magazine media includes Publishers Information Bureau (PIB) data
5. Internet figures do not include paid search advertising.
6. Local Radio includes expenditures for 34 markets in the
U.S.
7. FSI data represents distribution costs only.
8. The sum of the individual media may differ from the sub-totals or grand total due to rounding.
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Top Ten Advertising Categories:
Q1 2007 vs. Q1 2006
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CATEGORY
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JAN-MAR 2007
(Millions)
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JAN-MAR 2006
(Millions)
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% CHANGE
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FINANCIAL SERVICES
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$2,108.8
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$2,046.2
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3.1%
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TELECOMMUNICATIONS
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$2,101.3
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$2,274.6
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-7.6%
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LOCAL SERVICES & AMUSEMENTS
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$1,837.6
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$1,825.7
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0.6%
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AUTO, NON-DOMESTIC
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$1,820.9
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$1,898.5
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-4.1%
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MISC RETAIL1
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$1,720.5
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$1,667.2
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3.2%
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DIRECT RESPONSE
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$1,702.9
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$1,530.0
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11.3%
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AUTO, DOMESTIC
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$1,671.6
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$1,874.3
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-10.8%
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PERSONAL CARE PDTS
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$1,298.8
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$1,282.8
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1.2%
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TRAVEL & TOURISM
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$1,253.7
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$1,319.6
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-5.0%
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RESTAURANTS
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$1,230.7
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$1,212.4
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1.5%
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TOTAL
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$16,746.7
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$16,931.3
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-1.1%
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Source: TNS Media Intelligence
Note: Figures do not include Local Radio, FSI or PSA activity. The sum of the individual categories may differ from the total due to rounding.
1 Misc Retail does
not include these retail segments: Department Stores, Food Stores; Home Furnishing & Appliance Stores
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