Ad Spending Jumps in First Quarter, Fueled by Olympics and Early Political Ads

Consumer Magazines Suffer 'Severe Reductions' by Top Advertisers

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Ad spending in U.S. measured media in the first quarter of the year rose 5.7% from the quarter a year earlier, according to a new report by Kantar Media. Marketers spent almost $34.9 billion, Kantar Media said.

The first quarter last year saw spending slip 0.1%, but 2014 had the benefit of the Sochi Winter Olympics to fuel gains, along with higher spending for the NFL playoffs and Super Bowl. Political spending ahead of the November elections also started earlier than usual and boosted the numbers.

"The Winter Olympics delivered its expected windfall in the first quarter," said Jon Swallen, chief research officer at Kantar Media North America, in a statement.

The growth rate was just below 4% without the Olympics' contribution, he said.

"But the nature of the event is that this money is narrowly distributed and doesn't benefit all sectors of the market," Mr. Swallen added.

TV was the biggest winner. Network ad spending saw a first-quarter year-over-year gain of 14.5%, half from the Olympics alone. Marketers spent 7% more on spot TV ads, where political money also played a part. Cable spending grew 6.2% in the first quarter, and Hispanic TV saw a solid 18% rise.

Print publications didn't reap the same benefits, and consumer magazines slipped 2% when Procter & Gamble and L'Oreal, the two largest magazine advertisers, made "severe reductions" in their spending there.

Sunday magazine spending dropped 5.6% in the first quarter, compared with the quarter a year earlier, because of cutbacks by pharmaceutical, financial and travel marketers.

Display ads online, meanwhile, returned to significant growth, rising 13% on higher budgets from financial, retail and insurance marketers.

Procter & Gamble, the largest advertiser, trimmed its outlay 2.6% from the quarter a year earlier but still spent $773.8 million, Kantar Media said. GM increased its spending the most, 55.8%, to promote its vehicles as its recall debacle began to take hold. It spent $593.4 million in the first quarter, enough to move up from No. 5 to the No. 2 spot among the biggest spenders.

Verizon, No. 5 in the quarter behind AT&T and Comcast, spent $370.8 million, 24.8% more than the quarter last year, as it pushed wireless and broadband services more heavily in the wake of buying out Vodafone's ownership stake, Kantar Media said. AT&T increased spending 4.9% while Comcast grew spending 5.4%.

Auto manufacturers and dealers again comprised the largest ad category, with nearly $3.8 billion in spending, 7.7% more than in the first quarter of 2013, according to Kantar Media. Ad spending on retail, the second-largest category, rose 1.6% to $3.4 billion. Among the top 10 categories, insurance grew the most, up 30.8% to $1.6 billion.

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