Ad Growth Slows in the Second Quarter

Marketers spent $34.4 billion on advertising in the second quarter of the year, a meager 0.9% increase over the equivalent period a year earlier, according to Kantar Media's latest report. Year-over-year ad spending had increased 2.6% in the first quarter. Spending in the first half grew 1.9% from the first half of 2011, according to the report. "Ad spending growth sputtered during the second quarter and was unable to sustain its early year momentum," said Jon Swallen, chief research officer at Kantar Media North America, in a statement. "The advertising market is mirroring the tepid, slow growth performance of the general economy." "The third quarter results will get a short-term boost from the Summer Olympics and political advertising," he added. "But sustained long-term improvement will probably be linked to the health of consumer spending on the goods and services that marketers provide." Ad spending on TV increased 4.4% in the second quarter from the quarter a year prior, Kantar said, with growth from Spanish-language TV (17.8%), cable (4.2%) and syndication (10%). Spot TV advertising rose 4.6%, due in part to political spending in swing states. Ad spending also increased 2.5% for outdoor media and 1.9% for radio, according to Kantar. Print media and online display, however, were less successful during the period. Ad spending declined 1.9% for local newspapers, 2.5% for Spanish-language newspapers, 2.6% for consumer magazines, 5.4% for display ads online and a whopping 10.7% for national newspapers. Six of the 10 largest U.S. ad spenders reduced their outlays from the quarter a year earlier, including Procter & Gamble, down 13.2%; AT&T, down 21%; and General Motors, down 30.1%, Kantar said. But the reductions aren't necessarily a reliable guide to the marketers' overall spending for the year because many deferred a portion of their spending for Summer Olympics TV sponsorships in July and August. Unilever increased its ad spending 48.6%, more than any other top 10 advertiser. Spending on advertising within the top industry sectors rose 1.3%, to $21.2 billion. Retail ad spending totaled $3.8 billion, more than for any other category, but just 0.9% more than a year before. This represents a "sharp slowdown" in growth from the first quarter of 2012, when retail ad spending expanded 8.6%, according to Kantar. The decline in growth resulted from reductions in spending by home improvement and home furnishing stores, Kantar said. Automotive spending, on the other hand, expanded 7.7% from a year earlier to reach about $3.4 billion, as dealer budgets rose 16.8% and manufacturers boosted their spending 2.2%. Food and candy marketers logged the steepest decline in advertising outlays among the top economic sectors, cutting spending 5.5%.

Ad Growth Slows in the Second Quarter

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