• by Joe Mandese  @mp_joemandese, November 25, 2003

Following a spate of mixed signals and some moderate downgrades to the U.S. advertising outlook, new data suggests the advertising marketplace is in fact strengthening.

Ad spending in the media measured by Nielsen Monitor-Plus grew 5.7 percent during the third quarter of 2003, the fastest rate of quarterly expansion during a year that has seen consistent sequential growth. While Monitor-Plus only tracks past ad spending behavior and does not forecast future spending patterns, Jeff King, managing director of the Nielsen unit said the data "suggests a strong total year gain" for 2003.

The year began with a modest 1.5 percent rate of growth during the first quarter, expanded by 3.6 percent during the second quarter and climbed 5.7 percent during the third quarter, bringing the year-to-date growth rate to 3.3 percent.

Measured Media Ad Spending Growth (Vs. Same Period 2002)

Q1 2003           +1.5% 
Q2 2003
+3.6% 
Q3 2003           +5.7% 
First 3 Quarters  +3.3% 

Source: Nielsen Monitor-Plus.

That's about the rate of growth several top forecasters had predicted for full-year 2003, though the Monitor-Plus trend data suggests U.S. advertising growth may now surpass that.

While U.S. economic indicators remain erratic, most national advertisers are reporting improved earnings results and the Conference Board on Tuesday reported that the Consumer Confidence Index shot up 10 percentage points in November, marking its highest level since the fall of 2002.

Meanwhile, the new Monitor-Plus data indicates the recovery has been anything but uniform. Some media, including Hispanic TV networks, local magazines and cable TV networks, have been growing at solid rates, while others have seen only moderate increases. Only two national media, spot radio and outdoor, recorded declines in ad spending during the third quarter.

Ad spending also appears to be mixed among the major national advertisers. Procter & Gamble's ad spending surged 28 percent to $2.008 billion, making it the largest advertiser during the first three quarters of 2003 and moving it ahead of General Motors Corp. GM actually reduced its spending 4 percent to $1.628 billion. The other major automakers also cut back: Ford fell 5 percent to $978 million, while DaimlerChrysler fell 9 percent to $873 million.

Other bright spots included media conglomerates like Time Warner (+3 percent) and Walt Disney Co. (+17 percent).

Q3 Ad Spending Growth By Medium (Vs. Q3 '02)

Hispanic Networks    +19.3% 
Local Magazines      +11.9% 
Cable Networks        +8.9% 
National Newspapers   +8.8% 
Spot TV               +5.9%

Local Newspapers      +5.7% 
National Magazines    +5.1% 
Syndicated TV         +4.4% 
Network Radio         +3.8% 
Network TV            +3.4% 
Spot Radio            -0.8%

Outdoor               -1.6% 

Total                 +5.7% 

Source: Nielsen Monitor-Plus. Spot radio is monitored in 19 markets. Newspapers reflects display advertising only.