Ad Spending Grows Again in the Second Quarter -- but Growth Slows Again, Too

Automotive Throttles Back Increases Almost to Zero

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The growth in U.S. ad spending continued to slow in the second quarter of 2011, increasing 2.8% from the second quarter of 2010, according to a new report from Kantar Media. U.S. ad spending had increased 4.4% in the first quarter, the smallest rate of growth since ad outlays began rising again.

"Advertising grew at a slower rate in the second quarter, contributing to speculation about the durability of an advertising recovery that is into its second year," Jon Swallen, senior VP-research at Kantar Media North America, in said a statement accompanying the new numbers.

A majority of media sectors actually improved their performance between the first quarter and the second, Mr. Swallen said, but spending growth for the top 100 advertisers stalled in the second quarter, leaving the ad market more dependent on smaller spenders for increases.

Ad spending in the first half of 2011 increased 3.2% from the first half of 2010, Kantar said, pegging more than half the dollar gains to the internet and its 10.4% surge. Online display ad spending expanded 12.9% while search ad spending -- or at least search at Google, Kantar's proxy -- grew 8.6%, both aided by new activity in the travel, local service and insurance categories.

TV ad spending grew 1.8% in the first half as cable shot up 11.8% -- partly on the shift of some BCS college football games and March Madness college basketball games to cable from CBS -- while the broadcast networks fell 7.6% from their level in the first half last year.

Consumer magazine ad spending grew 4% in the first half after growth in the first quarter yielded to a decline in the second quarter, Kantar said.

Among the major ad categories, local services increased spending the most, 10%, in the first half, followed by personal-care products, up 9.9% from the first half a year ago, and automotive, up 9.3%, according to Kantar. Automotive remained the biggest category of ad spending and continued to grow -- but pulled back in the second quarter, improving only 0.8%. The list of the 10 largest advertisers included four auto marketers in the first quarter but only two in the second.

Procter & Gamble, the largest advertiser, cut its ad spending 7.8% in the second half, shifting budgets into Spanish-language media and display advertising online at the expense of consumer magazines and broadcast and cable TV, Kantar said.

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