Top Advertisers Slash Spending, Internet Continues To Build Share Of U.S. Ad Budgets

As might have been expected, the Internet picked up share of U.S. ad spending during 2006, according to new estimates released this morning by TNS Media Intelligence. What might not have been expected, is that the nation's largest advertisers eroded their share of U.S. ad spending. And the two trends may be related. While total ad dollars in the media tracked by TNS rose 4.1% to $149.6 billion in 2006, ad spending by the ten largest national advertisers actually fell 2.8% to $18.727 billion.

Share Of Ad Spending By Medium

MEDIA TYPE

2006

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2005

TELEVISION

43.7%

43.2%

MAGAZINES

19.9%

20.0%

NEWSPAPERS

18.7%

19.9%

RADIO

7.4%

7.6%

INTERNET

6.5%

5.8%

ALL OTHER

3.8%

3.5%

Source: TNS Media Intelligence

The cutbacks were most pronounced among big automotive advertisers such as General Motors, which slashed its ad budget 23.7% to $2.295 billion in 2006, falling from No. 1 in 2005 to No. 2 in 2006 behind packaged goods giant Procter & Gamble. P&G boosted its spending 3.3% to $3.339 billion in 2006.

Another big automaker, DaimlerChrysler, declined as well, dropping 10.7%, though Ford Motor Co. actually boosted its spending 8.5%.

Healthcare and pharma marketer Johnson & Johnson (-19.8%) and entertainment/media conglomerates including Time Warner (-12.0%) and News Corp. (-2.4%) declined, and Walt Disney Co. (+0.9%) was essentially flat. The big category on the rise among the top 10 was telecommunications, with AT&T up 30.8% and Verizon climbing 10.4%. Both those companies acquired new operations during 2006, but also have been aggressive adopters of online advertising.

"The intense competition in this arena is reflected in the double-digit growth rates of ad budgets at nearly all the key companies including AT&T, Verizon, Comcast, Deutsche Telekom and Vonage," TNS said of the telecommunications category.

At +4.1%, the overall expansion of measured media spending is moderate, but is at about the level predicted by many forecasters. Not surprisingly, the growth has been driven by online, reflecting at fundamental shift taking place in the underlying media economy. While TNS' estimates do not include search, Internet display advertising registered a 17.3 percent increase to $9.76 billion as marketers continued to shift budgets towards targeted, digital media.

Spot TV, boosted by record-setting levels of political advertising, was up 10.4 percent for 2006 to $17.23 billion. In the fourth quarter, which contained the last five weeks leading up to Election Day, Spot TV expenditures jumped 20.7 percent.

Performance in the rest of the media economy was muted.

Ad Spending (In Millions) by Medium: 2006 vs. 2005

 

MEDIA

2006

2005

CHANGE

TELEVISION MEDIA

$65,373.3

$62,103.1

+5.3%

·    NETWORK TV

$22,879.2

$22,313.1

+2.5%

·    SPOT TV

$17,233.7

$15,614.8

+10.4%

·    CABLE TV

$16,746.0

$16,196.6

+3.4%

·    SPANISH LANGUAGE TV

$4,279.3

$3,756.1

+13.9%

·    SYNDICATION - NATIONAL

$4,235.1

$4,222.5

+0.3%

NEWSPAPER MEDIA

$27,972.1

$28,645.8

-2.4%

·    NEWSPAPERS (LOCAL)

$24,057.5

$24,872.2

-3.3%

·    NATIONAL NEWSPAPERS

$3,539.2

$3,427.5

+3.3%

·    SPANISH LANGUAGE NEWSP

$375.4

$346.1

+8.5%

MAGAZINE MEDIA

$29,833.4

$28,738.5

+3.8%

·    CONSUMER MAGAZINES

$23,190.5

$22,169.1

+4.6%

·    B-TO-B MAGAZINES

$4,144.9

$4,260.2

-2.7%

·    SUNDAY MAGAZINES

$1,881.0

$1,739.4

+8.1%

·    LOCAL MAGAZINES

$461.6

$428.2

+7.8%

·    SPANISH LANGUAGE MAG

$155.4

$141.7

+9.7%

RADIO MEDIA

$11,054.8

$11,017.7

+0.3%

·    LOCAL RADIO

$7,355.3

$7,403.6

-0.7%

·    NATIONAL SPOT RADIO

$2,695.0

$2,604.1

+3.5%

·    NETWORK RADIO

$1,004.5

$1,009.9

-0.5%

ALL OTHER MEDIA TYPES

$15,415.7

$13,303.4

+15.9%

·    INTERNET

$9,756.1

$8,318.0

+17.3%

·    OUTDOOR

$3,831.2

$3,528.8

+8.6%

·    FSI's

$1,828.4

$1,456.5

+25.5%

TOTAL

$149,649.3

$143,808.4

4.1%

 

Source: TNS Media Intelligence. Figures are based on the TNS Media Intelligence Stradegy™ multimedia ad expenditure database across all TNS MI measured media, including: Network TV; Spot TV; Cable TV (44 networks); Syndication TV; Hispanic Network TV; Consumer Magazines (212 publications);,Sunday Magazines (6 publications); Local Magazines (27 publications); Hispanic Magazines (26 publications); Business-to-Business Magazines (387 publications); Local Newspapers (145 publications); National Newspapers (3 publications); Hispanic Newspapers (54 publications); Network Radio; Spot Radio; Local Radio; Internet; and Outdoor. Figures do not include public service announcement (PSA) data. Network TV figures include the CW and MyTV networks, both of which launched in Sept 2006. Spot TV figures do not include Hispanic Spot TV data. Local Radio includes expenditures for 34 markets in the U.S. Internet figures do not include paid search advertising. FSI data represents distribution costs only. The sum of the individual media may differ from the total due to rounding.

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