Ad spending in the media tracked by Nielsen Monitor-Plus shot up 5.7 percent during the first half of 2005, a faster rate of growth than some forecasters had been predicting. The growth came despite a pronounced downturn in spending by one of the biggest stimulants to the national advertising scene, especially TV: direct-to-consumer prescription drug ads. "For the first half, we're reporting spending as flat," Jeff King, managing director of Monitor-Plus, emphasized Tuesday during a conference call on the first half ad results. The prescription drug downturn was especially dire for TV. As the major pharmaceutical marketers attempt to demonstrate restraint in the face of growing criticism over consumer marketing of certain drug brands--particularly newer ones--TV appears to be an early casualty. King said prescription drug marketers slashed spending on syndicated TV by 40 percent, on spot TV by 25 percent, and on network TV by 7 percent during the first half--although cable TV appears to have been a beneficiary, with direct-to-consumer ad spending up 29 percent. King said the downturn is significant, noting that at $2.4 billion in first half spending, the prescription drug ad category is now the second largest after automotive. While total DTC category spending inched up 0.4 percent, the slowdown was evident among some of the biggest marketers and brand in the category. Pfizer, the largest prescription drug advertiser, slashed consumer ad spending by 35 percent during the half, dropping out of the top ten U.S. ad spenders. King noted it pulled back ad support for many of its highest-profile brands. Viagra, for example, dropped by 43 percent. Despite the prescription drug cutbacks, King said there was enough stimulus among other major--and some emerging--advertising categories to sustain the overall growth in the ad economy. Even the controversial food marketing category, which has also come under pressure to demonstrate restraint, particularly with ads and products aimed at children, has seen little sign of ebbing. In fact, the fast-food restaurant category grew by nearly 12 percent during the first half, making it one of the fastest rising ad categories. We haven't seen a drop off in fast food activity in kids programming," acknowledged King, adding forebodingly, "Perhaps that's coming in the future. But we have not seen that as of yet." In other category ad battles, heavy year-end incentive advertising by domestic automakers pushed spending up at double-digit rates for General Motors and Ford. A corresponding cutback by packaged goods marketer Procter & Gamble, dropped it behind GM as the nation's largest advertiser during the first half. Interestingly, while overall ad spending is growing at healthy single-digit rates, the fastest-rising medium during the first half was not the Internet--at least not online display advertising (see related story in today's MDN, but Spanish-language TV, followed by cable TV. While Internet ad spending turned in a 12.6 percent growth rate over the first half of 2004, that rate is much lower than what has been tracked by trade groups like the Interactive Advertising Bureau, and a number online ad forecasters. By comparison, ad spending on Spanish-language TV networks such as Univision and Telemundo rose 15 percent over the first half of 2004, while spending on cable networks shot up 13.1 percent, according to Monitor-Plus, which physically monitors advertising occurrences in the major media and ascribes an ad dollar value to what actually runs. The Internet ad spending data was derived from Nielsen//NetRatings' database. As strong as the first half results are, Jeff King, managing director of Monitor-Plus, said they are continuing to strengthen. He noted that the rate of ad spending growth actually improved during the second quarter. "In particular, spending for the top 100 spot television markets was down in the first quarter, but bounced back to a 3.1 percent gain in the second quarter," said King, in a release issues prior to a midday conference call scheduled for today. By comparison, network TV lagged the overall growth of Nielsen measured media, rising just 4.9 percent over the first half of 2005. That comparison, however, reflects the inclusion of the Winter Olympics during the first half of 2004. Local and national magazines (up 8.7 percent and 7.9 percent, respectively), and outdoor (+6.9 percent), paced ahead of network TV in terms of first half growth. Business media, national and local newspapers, and radio all trailed the market.
Spending for online display ads rose 12.6 percent in the first half of 2005, according to estimates released Tuesday by Nielsen Monitor-Plus. That rate, although more than double the 5.7 percent growth in overall ad spending, was lower than projections by other online ad forecasters. JupiterResearch forecast earlier this month that spending for online display ads would reach $5.1 billion this year, up around 25 percent from last year's $4.1 billion. Other researchers and analysts anticipated even higher numbers. Goldman Sachs predicted that online advertising overall (including search) would soar by 28 percent for the year; Forrester Research predicted that all online advertising would climb by 23 percent this year; and research firm eMarketer predicted a 34 percent increase. Data from Nielsen Monitor Plus also shows that America Online spent far and away more money on national TV advertising than rival Internet service providers. AOL paid around $153 million in the first six months of this year to advertise its service's virus safety and security features on television--including the major networks, cable, syndication, and spot TV. The second-biggest spender among ISPs was PeoplePC, which paid around $97 million to promote its $10.95 a month dial-up service on television.
In a growing trend for DVD marketing, major retailers such as Wal-Mart and Best Buy are getting exclusive entertainment products to sell from studios and TV networks. The latest deal is from Viacom cable network BET, in which Wal-Mart will offer specially packaged music and movies from BET-aired entertainment content. Entertainment DVDs and CDs will be exclusively sold at Wal-Mart under the BET brand as "BET Official," in retail sections in Wal-Mart and Sam's Club locations. The deal is especially interesting, because Wal-Mart, the nation's largest mass retailer, has also been expanding into media, cutting deals with Time Inc. to publish All You magazine, and launching the Wal-Mart TV network, a place-based television network in Wal-Mart stores with Premiere Retail Networks. The first to hit stores is a DVD release from singer Kanye West, which went on sale yesterday. The DVD will be paired with West's new CD project "Late Registration" in a special CD/DVD two-pack. The DVD also includes never-before-seen concert footage of West. Last week, Walt Disney's Buena Vista Home Entertainment struck an agreement with Wal-Mart for the exclusive release of a new animated DVD premiere feature film, "The 3 Wise Men," which will be available for the holidays. Best Buy is another retailer that strikes DVDs deals. It has done deals for exclusive added-value content with MGM for its James Bond film series. In recent years, Elton John and The Rolling Stones have done exclusive DVD deals for Best Buy. On September 6, Best Buy will have an exclusive extra disc of the first season of ABC's "Lost." Entertainment content providers believe that offering exclusive deals gives a major retailer like Wal-Mart the incentive to more heavily promote and display DVD/CD products. This is especially necessary in an increasingly cluttered DVD marketplace, where it can be difficult to sell products.
Years after the TV industry began clamoring for ratings of out-of-home viewers it has finally gotten them, albeit from a company known for radio ratings. Arbitron Tuesday claimed a TV industry first, providing electronic measurement of out-of-home TV viewing in Houston, where it is conducting an extensive field trial of its new portable people meter ratings system. Not surprisingly, Arbitron said the data showed that out-of-home viewers were "a significant percentage of the audience" for the program it tracked: NASA's July 26th launch of the space shuttle. According to the PPM data, 118,300 persons six or older watched the shuttle launch from out-of-home locations, accounting fro 11.3 percent of Houston's total TV audience among the 62 stations and networks that have been encoding their programs as part of Arbitron's test. For the five local broadcast stations and four cable news networks that actually covered the shuttle launch, the out-of-home viewers accounted for 25 percent of their total audience. While Arbitron did not release any demographic data from the out-of-home ratings, Pierre Bouvard, president, of Arbitron's PPM project implied, "We're beginning to learn that out-of-home television viewing is more than just men in bars, watching sporting events in the evening. It's also women at work in the middle of the day, a previously unreported audience for stations and their advertisers. " Nielsen Media Research retains an option to develop a joint venture with Arbitron to market PPM data for TV and radio audience measurement. Nielsen has said it would make a go/no-go decision on that option by the end of the year. Recently, some friction has risen between the two researchers over their plans. Nielsen declined to help Arbitron recruit or promote its Houston market trial, and the two companies have expressed markedly different plans for the potential rollout of a PPM service. Nielsen has eschewed using it in the largest markets, where it has been deploying conventional people meters, while Arbitron has indicated it would like to introduce PPMs in all the largest markets. Amid this backdrop, the radio industry, which still depends on Arbitron's paper diaries as a method for estimating its audiences, has been pushing for the development of an electronic measurement system.
Five months after its launch, Conde Nast is bringing new management in to run Cargo, its new shopping magazine aimed at men. Lance Ford, president of American Media, has been named vice president and publisher of the fledgling Condé Nast title. Ford apparently has plenty of experience publishing to laddie crowd. While at Dennis Publishing in the late 1990's, Ford steered the launches of Maxim, Stuff, and Blender. But he actually began his publishing career with advertising sales positions at Condé Nast flagships such as Gourmet, The New Yorker, and Bon Appétit, where he was the associate publisher. Condé Nast is owned by Advance Magazine Group. The first half of 2005 was good to Cargo, and the magazine posted revenue of $16,115,525 for the first half of this year--up sharply from $9,435,130 over the same period in 2004, according to Magazine Publishers of America figures, a jump of 70.8 percent. Cargo's 2005 pages were also up over the same time period--329.59 this year versus 242.16 in 2004, an increase of 36.1 percent. Ford succeeds Alan Katz as Cargo's publisher. Katz left the magazine this month to become vice president and publisher of Vanity Fair. Condé Nast Publications also announced last week that it will be launching a business magazine and Web site under the direction of former Wall Street Journal Deputy Managing Editor Joanne Lipman. Former New Yorker Publisher David Carey will also supervise a new business group overseeing the as-yet-unnamed publications.
The networks have formally begun their fall season programming assault, and Fox is the first to strike pay dirt. "Prison Break"'s two-hour premiere on Monday debuted to a healthy Nielsen 4.6 rating/12 share with adult viewers 18-49. The show, about a man who purposely holds up a bank to get into prison to help his brother escape, will have another airing this week. It'll settle back into its regular time slot, Mondays at 9 p.m. "Prison Break" is technically a pre-season start of sorts. Since the actual start to the new fall season doesn't occur for a couple of weeks, according to Nielsen, Fox is looking to gain some marketing advantages without the clutter of other new network programming. That said, Fox did well, according to analysts. Still, it wasn't against much new programming, and a truer test will arrive when all the networks are in full swing. On Monday, CBS came in second, averaging a 3.3/9 for a bunch of repeats--"The King of Queens" (2.6/8), "Everybody Loves Raymond" (2.7/8), "Two and a Half Men" (a 3.3/8 and a 3.5/9), and "CSI: Miami" (3.7/10). ABC's "Monday Night Football" had a pre-season match-up between the St. Louis Rams and Detroit Lions, averaging a 3.1/8. NBC came in fourth with a 1.8/5, with repeats of "Fear Factor" (1.8/5), "Las Vegas" (1.9/5), and "Medium" (1.8/5). Well behind that was UPN, putting up a slim 0.8/2 and the WB with a 0.7/2. In other summer ratings news, Turner Broadcasting continues to tout its big summer success. For the entire summer period, TNT prime ratings picked up 17 percent to averaging 2.90 million viewers, thanks to the new original series "The Closer" and "Wanted," and the miniseries "Into the West." USA Network came in second place with 2.32 million viewers--down 8 percent from last year--mostly from a dropoff from "The 4400," which debuted last summer to strong ratings. Among other big networks' scores: Fox News soared 27 percent to 1.91 million viewers. Lifetime charged up 7 percent to 1.81 million. TBS was down 5 percent to 1.66 million. Cartoon Network was off 8 percent to 1.58 million viewers. Big gainers included Spike TV (up 63 percent), Hallmark Channel (up 38 percent), AMC (up 25 percent), and MTV (10 percent higher). Losers included Discovery Channel (down 19 percent), ESPN (off 12 percent), CNBC (12 percent lower), FX, and A&E (each down 7 percent).