Ad Revs Perk Up 4.4%, Cable TV Spend Skyrockets

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The U.S. advertising economy continued to grow in the first quarter of the year -- although at a slightly slower pace than in previous periods.

Advertising revenues grew 4.4% to $32.5 billion in the first quarter, according to Kantar Media. By comparison, the fourth quarter of 2010 witnessed a 7.0% hike and the third quarter stood at a strong 8.7% increase, with the second quarter at a 5.1% addition.

Kantar says the slower growth should be put in perspective -- considering the overly aggressive rise of first quarter-2010 coming out of the recession.

"Despite slowing growth, there are positive signs," says Jon Swallen, senior vice president of research for Kantar Media Intelligence NA. "The market expanded by $1.4 billion during the first quarter, which nearly equals the amount of gain at the start of 2010 when the recovery began. In addition, a rising proportion of advertisers are increasing their ad budgets and this indicates spending growth is still rippling outward through the market."

Kantar says television got a major push in the first quarter -- with an overall 5.3% gain. Cable TV was a major reason, with ad spending rocketing up 31.9%. Much of this infusion came from first-time coverage of the NCAA Men's Basketball Tournament on Turner networks and a consolidation of major college football bowl games at ESPN.

Cable television wasn't the only TV business beneficiary. Syndication television had a 16.5% rise -- mostly from larger ad money from consumer packaged-goods marketers.

At the same time, network TV ad spending sank 10.4% due to the absence of Winter Olympics and college bowl games during the period. Another factor was the off-year reduction in political advertising, which sank spot TV by 1.2%.

Internet display continued to show growth with a 14.6% boost, and a strong demand by automotive, media and travel advertisers was the reason. Outdoor advertising also had a similar double-digit improvement at 12.5% -- as a result of more local service, education and financial service advertising categories.

A revival among magazines continued, with an overall 4.5% hike. Consumer publications, in particular, were a big part of this -- growing 6.2%, with sports-related enthusiast titles particularly healthy. Spanish-language magazines witnessed a 22.3% gain, and business-to-business publications eked out a small 1.0% rise.

Kantar says local radio was up 3.4% -- more ad money from auto dealers and insurance marketers countered weak ad spending from local retailers, telecom and restaurants.

Newspapers continued to struggle -- although not as much as in recent quarters. Local newspapers were down 1.1%, now at almost a six-year continuous decline. National newspapers were off 7.5%, and Spanish-language newspapers dropped 7.4%.

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