• by Paul Gough , June 11, 2003

The first quarter was better than expected to the advertising industry, ad revenues rising 4.9% to $28.4 billion compared to a year ago, according to a report released Wednesday afternoon by TNS Media Intelligence/CMR.

Every medium saw an increase, although two sub-sectors - network television and national newspapers - saw slight drops. Overall broadcast advertising rose 2.8% to $14.7 billion compared to the first quarter of 2002. Print advertising jumped 6.7% to $11.6 billion. Internet rose 12.2% to $1.5 billion. Outdoor advertising also increased in the quarter, up 2.2% to $562.4 million.

"It really is a continuation of the trend that we saw in the third quarter of last year. The market began to rebound during the third quarter after a relatively flat first half. We take this as a healthy sign that the [advertising] market is recovering," said George Shababb, senior vice president of product development at TNS Media Intelligence/CMR.

The new year began with predictions that a war in Iraq, coupled with the weak economy, would have a dire effect on the advertising market. But with the exception of cable news networks that had to ditch advertising to cover the war, Shababb said the other media wasn't adversely affected by the war once it happened. Network television ad spending did drop but it was in comparison to 2002 as an Olympics year.

While network television was down 5.9% to $5 billion and spot television was up a relatively flat 0.6% to $3.73 billion, the rest of the broadcast sector saw mostly double-digit returns. Ad revenue in Spanish-language television continued to see increases of 19.5% to $508 million and cable TV saw an increase in the quarter of 18% to $2.5 billion. Shababb said the increase in advertiser spending on cable was a continuation that TNS Media Intelligence/CMR had seen in the marketplace.

"Cable as a medium is gaining wider acceptance among traditional advertisers. The fact of the matter is that one cannot overlook the gains they have made in viewers ... In terms of the costs, relatively speaking, they're an effective buy," Shababb said of cable TV.

Spanish-language television, which is measured by expenditures at Univision, Telemundo and Telefuture, is expected to continue to grow in the U.S. marketplace and advertisers continue to get on board and increase their spend.

National spot radio rose 11.1% to $526.9 million and network radio increased 9.1% to $227 million. Local radio, which increased 4.7%, includes expenditures for 32 markets nationwide.

The news for magazines wasn't as bad as it's been, with TNS Media Intelligence/CMR saying that a recovery is occurring. The only loser in print for the first quarter was national newspapers, and ad revenues dropped only 0.7% to $675.9 million. Consumer magazines continued their rebound with a 12% increase to $3.7 billion. Local magazines, for the first time broken out in the TNS/CMR survey, rose 10.4% to $77.1 million. Local newspapers, business-to-business magazines and Sunday magazines saw increases between 4.4% and 8.4%.

Internet spending is increasing as Shababb said the medium is being adopted by traditional blue-chip advertisers and benefiting from a continuing evolution of the media. A combination of new ad formats, streaming media and the ability to deliver a better-crafted message is starting to turn the heads of both advertisers and consumers, the report said.

The TNS/CMR quarterly report also tracks the top 10 spenders in the first quarter of the year compared to the same period a year ago. More than half the nation's top 10 advertisers increased their ad expenditures during the quarter for nearly $4 billion in increases.

Top advertiser Procter & Gamble Co. increased its ad spending 22.7% to $608 million. Sony Corp. jumped ad spending 41.3% to $261.9 million. Johnson & Johnson increased ad spending 34.8% to $299.8 million. Ford Motor Co. added 26.8% to its ad spending for a total of $323.6 million for the quarter. Three of the top 10 advertisers - Altria Group Inc., AOL Time Warner and the nation's second biggest advertiser, General Motors - dropped their ad spending for the quarter.