"The moderate increase in [first-quarter] advertising expenditures fell a bit short of our previously released growth forecast of 5.5%," Steven Fredericks, president-CEO, TNS, said in a statement. "Overall, the recent trend line in share of spending by major media segment has continued into 2006, while spending within key category segments displayed more volatility than normal."
Double-digit gains were delivered by the Web, where spending rose 19.4% to $2.3 billion; inserts, whose total climbed 18.5% to $475.3 million; Spanish-language media, which collected $1.1 billion, up 14.2%; network TV, where spending increased 12.3% to $6.5 billion; outdoor, which rose 11.1% to $848.8 million; local magazines, which took in 11% more than last year for $110.3 million in total; and Sunday magazines, whose estimated revenue grew 10.1% to $438.5 million.
National newspapers grew 6.7% to $855 million, TNS reported, while spot TV grew 6.4% to $3.9 billion, national syndication grew 6.2% to just over $1 billion, consumer magazines grew 5.9% to $4.8 billion and cable TV grew 2.2% to $3.6 billion.
Spending in only five media categories declined from last year's first-quarter totals. Local newspapers saw revenue drop 6.1% to nearly $5.6 billion, network radio fell 3.5% to $216.9 million, business-to-business magazines dipped 1.8% to $1.1 billion and local radio lost 1.1% for a $1.6 billion total.
P&G spends the most
Procter & Gamble Co. held its spot as the biggest advertiser, deploying $794 million during the first quarter, up a hefty 13.8% from first-quarter 2005. General Motors Corp. took second place, at $706 million, but trimmed spending by 1.9%. AT&T's branding campaign meant 51% more spending, for a total of $625.1 million. And General Electric Co., No. 8 on the top 10 list, expanded its outlay 45.9% to reach $327.2 million.
The largest decreases among top 10 spenders occurred at media companies. Time Warner's spending fell 14% to $450 million; News Corp. also decreased spending, by 11.6% to $303 million; and Walt Disney Co. spending dropped 11.1% to $384 million.
A breakdown of ad spending by category showed that telecom surged to the top spot with a 20.4% increase for a total of $2.3 billion. Domestic auto fell 11% to $1.9 billion, though foreign auto fell only 2.6% to nearly $2 billion.
Within domestic auto, different companies handled their budget reductions differently, said Jon Swallen, senior VP-research, TNS. At the corporate level, GM increased its network TV and consumer-magazine spending, offsetting that with a 74% reduction in local-newspaper advertising and a 10% cut in cable TV spending.
Ford, also at the corporate level, increased network TV and spot TV budgets while cutting consumer-magazine spending 25% and local-newspaper spending 18%.
Advertising dictates media
"We often take a media-centric view of the world but it's really about the advertisers and the brands and the groups of brands," Mr. Swallen said. "Many of the shifts and the dynamics of advertising categories explain the volatility and corresponding changes in the performance of media segments."
TNS figures are widely followed particularly for the directional information they provide, but remain estimates that differ with others. A report released yesterday by the Interactive Advertising Bureau and PricewaterhouseCoopers, for example, estimated that online-ad spending rose 38% to $3.9 billion.