• by Paul Gough , August 29, 2003

The advertising market continued to beat expectations in the first half, and that appears to be good news for every medium.

Total ad spending grew 6.8% to $61.6 billion in the first half, according to a study released Friday by TNS Media Intelligence/CMR. Most categories showed single- or double-digit growth, with cable TV (up 16.7% to $5.7 billion), national syndication (up 15.8% to $1.6 billion), Spanish-language network TV (up 15.4% to $1.1 billion) and the Internet (up 15.3% to $3.2 billion) among the leaders. Only network TV showed a slight decrease and spot TV, national newspapers and business-to-business magazines were flat.

A MediaDailyNews analysis of the data finds that with minor exceptions, each medium is holding its share of advertising budgets through June 30. Minor slippage in network and spot TV occurred between 2002 and 2003, with television's share of the market moving from 44% in 2002 to 43% through the first six months of the year. A 1% gain in market share was picked up by print, led by the newspaper category, which has 42% of the market. No changes were reported in the market share of the Internet or outdoor, although ad spends were up year-over-year in both.

The new data shows that the advertising recovery might be moving from television toward a broader-based increase. Television, particularly two strong upfronts in 2002 and 2003, had been leading the recovery since the market turned sour in 2000.

Though more optimistic than other reports released in recent weeks, CMR's estimate is ahead its most recent revision three months ago. In late June, CMR said ad spending would increase 4.3% to $124.7 billion by the end of the year. The ad market seems to have survived comparisons between the Winter Olympics last year and no similar events in the first half. But it might not do so well against the $850 million spent on political advertising in 2002, the California gubernatorial recall election notwithstanding. CMR said in June that it expected $250 million would be spent on election advertising in 2003.

Television spending rose 5% to $26.3 million in the first half, compared to $25.2 million a year ago. Cable and national syndication both grew at double- digit rates, as did Spanish-language network TV. Cable raised its share of the market to 9% and syndicated added a percentage point to 3%. Spanish- language network TV's share remained constant, although it broke the $1 billion mark in advertising spending by June 30.

Radio's total share of the market remained static at 8%, although each category (local, national spot and network) gained. Overall ad spending on radio grew 5% to $31.3 billion in the first half.

Print's market share increased and all categories in both newspaper and magazines showed some kind of increase, although national newspapers and business-to-business magazines rose only slightly. Magazine's share of the advertising market stood at 22%, while newspapers' grew a percentage point to 20%. The hero of the newspaper market was the 11% rise in advertising at local newspapers for a total of $10.7 billion.

Internet spending jumped 15% to $3.2 billion, although its share remained steady at 5%. While some interactive advertising companies remained mired in a slump, others have seen a definite upturn in business. Yahoo! has seen a jump in advertising in the summer, which continued at least through July. A report released Friday by analysts U.S. Bancorp Piper Jaffray reported that Yahoo!'s ad impressions rose 20% in July, which is normally a slow month for the online service.

Piper Jaffray's report said that demand for online advertising revenues remained strong, with existing clients signing on for more and new clients joining Yahoo!'s ranks. In rating Yahoo! a buy, Piper Jaffray predicted its Overture acquisition would generate significantly larger revenues in 2004 barring another downturn.

TOP TEN AD SPENDERS: FIRST HALF 2003 vs. FIRST HALF 2002

Advertiser        First Half '02    First Half '03    Change

General Motors    $1,150 million    $1,271 million    +10.5% 
Procter & Gamble    $967 million    $1,264 million    +30.7%  
AOL Time Warner     $921 million      $966 million     +4.8%

DaimlerChrylser     $597 million      $758 million    +26.9%               
Ford                $627 million      $705 million    +12.4% 
Walt Disney Co.     $530 million      $633 million
+19.4%  
Johnson & Johnson   $504 million      $611 million    +21.2% 
Verizon             $555 million      $582 million     +4.8%       
Altria              $559 million      $558 million
-0.1%  
Pepsico             $446 million      $514 million    +15.3% 
Top 10 Total      $6,857 million    $7,862 million    +14.7%   

Source: TNS Media Intelligence/CMR.