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Ad Spending Rose 9.8% for 2004, TNS Reports

Internet Shows Largest Gain, Up 21.4%

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NEW YORK (AdAge.com) -- U.S. ad spending rose 9.8% to $141.1 billion from $128.5 billion in 2003, TNS Media Intelligence reported today.

Internet ad spending continues its climb to record levels.

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The media-spending tracking service showed gains for every medium but one. The exception: national spot radio, down 0.7% to $2.6 billion. The surging Internet showed the biggest gain, up 21.4% to $7.4 billion. Outdoor advertising had a strong 20.1% increase to $3.2 billion.

Syndicated TV
In TV, national syndication had the biggest gain (15.8% to $3.9 billion), followed by cable (up 13.8% to $14.2 billion), spot TV (up 11.7% to $17.3 billion) and broadcast network TV (up 10.7% to $22.5 billion).

Consumer magazines showed a robust 11.2% increase in measured spending to $21.3 billion. Newspaper gains were smaller, reflecting the challenges newspapers have to grow advertising and hold onto their circulation. Local newspapers, the single-largest ad medium with $24.6 billion in estimated ad spending, saw a 6.7% increase; national newspapers had a similar gain (6.6%) to $3.3 billion.

Hispanic media rose 4.7% to $3.9 billion, TNS reported. TNS's Hispanic sector includes Hispanic TV, magazines and newspapers.

P&G, GM remain biggest spenders
Procter & Gamble Co. continued as the top U.S. advertiser in 2004, increasing measured spending 7.4% to $2.9 billion. General Motors Corp. was No. 2, boosting measured media by 17.5% to $2.8 billion. The top 10 U.S. advertisers increased spending last year by 9.7%, tracking with the gain in overall advertising. TNS said the 10 largest advertisers accounted for 13.6% of U.S. ad spending in 2004.

"Advertising spending expanded steadily throughout 2004 and has now grown at a faster rate than the general economy in nine of the last 10 quarters," Steven J. Fredericks, president-CEO of TNS Media Intelligence, said in a statement. "Gains were seen in almost all forms of media. These increases were not exclusively attributed to the Summer Olympic[s] and the presidential election, nor confined to TV media, the form that most benefited from these two events."

Continuing recovery
The gains continued a recovery in U.S. ad spending that began in May 2002.

TNS's full-year gain came in well above that of a rival media tracking service, VNU's Nielsen Monitor-Plus. Nielsen last week said 2004 U.S. ad spending rose 6.3%. Measured media figures aren't the same as media revenue. TNS estimates figures using rate cards, and advertisers often pay a discount off the rate card.

For example, TNS estimated 2004 broadcast network ad revenue at $22.5 billion. Actual ad revenue reported by the top three networks -- ABC, CBS, NBC -- to a trade group, Broadcast Cable Financial Management Association, was only $11.7 billion.

But TNS percent changes offer a perspective on how different media types are performing. TNS, as noted, said broadcast networks had a 10.7% gain last year; that tracked closely with the actual 12.1% revenue increase for the top three networks as reported by BCFM.

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