Ad Spending Rebounded in First Quarter for First Gain in Two Years

Spot TV Benefits Most From Recovering Economy; Olympics Helps Spur Gains

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NEW YORK ( -- Ad spending in the U.S. finally rebounded in the first quarter of this year, the first year-over-year increase in two years and the biggest since the first quarter of 2006.

Advertisers increased their outlay to $31.3 billion in the first quarter, a 5.1% improvement over the first three months of 2009, reversing the string of quarterly declines that's been unfolding since the first quarter of 2006, according to data released today by Kantar Media.

It wasn't all good news in the first quarter, and some of the gains owed a lot to Olympics ad spending that doesn't come around often enough, but the overall picture was brighter than any the media business has seen for too long.

Spot TV ad sales benefited the most, advancing 22%, as an apparently recovering economy pushed auto, retail and financial advertisers to buy time they had not locked down in last summer's upfront buying season. Despite that growth, however, spot TV only recovered its 1997 level.

Good news for radio, Sunday supplements
Ad revenue also increased 19% for national radio spots, part of an overall rebound for radio that halted a three-year decline for the medium; 13.7% for Sunday newspaper supplements; 12.8% for newspaper inserts; 11.6% for network TV, which benefited from the Winter Olympics; and 10.5% for TV as a whole.

Not every sector enjoyed a pickup to start the year: Ad revenue fell 13.2% for nationally syndicated TV, 8.4% for business-to-business magazines, 7.1% for local magazines and 3.9% for consumer magazines, according to Kantar.

Among the major ad categories, automotive spent the most money on ads and increased its outlay the most. Car manufacturers expanded ad spending 20% to almost $2 billion while dealers pumped up spending 15.9% to nearly $1.1 billion for a combined 18.6% jump -- ending 18 consecutive quarters of declines.

Telecom, the second-largest category, posted the second-largest overall increase: a 10.6% increase in ad spending to reach $2.3 billion.

And financial services, the third-biggest spender in the category, boosted ad outlays 10.1% to $2 billion as credit card and loan marketing produced "sharply higher" spending, according to Kantar, compensating for softness in consumer banking. Restaurant advertising grew 3.1% with a major contribution from McDonald's television sponsorship of the Olympics.

Direct-response advertising, where spending slipped 3.2%, was the only category to decline.

Top 10 advertisers
The collective outlay from the country's top 10 advertisers grew 10.6% to $4.3 billion, as No. 1 spending Procter & Gamble expanded spending 17.7%, No. 2 AT&T increased its outlay 26.7% and No. 3 General Motors grew spending 28.5%, Kantar said.

But the biggest increase came from No. 5 on the list, Pfizer, which boosted spending 46.2% to $396.4 million.

The top 10 saw declines from just three marketers: Johnson & Johnson and Walt Disney, which each cut spending 11.8%, and Verizon, which decreased spending 9.1%.

Percent Change in Measured Ad Spending1
(Listed in order of spending)
Jan.-Mar. 2010 vs. 2009
- Network TV 11.6%
- Cable TV2 8.2%
- Spot TV3 22.0%
- Spanish-Language TV4 7.2%
- Syndication - National -13.2%
- Consumer Magazines -3.9%
- B-to-B Magazines -8.4%
- Sunday Magazines 13.7%
- Local Magazines -7.1%
- Spanish Language Magazines 1.5%
- Newspapers (Local) -5.6%
- National Newspapers 9.1%
- Spanish Language Newspapers 4.5%
(display ads only)
- Local Radio7 4.6%
- National Spot Radio 19.0%
- Network Radio 3.0%
FSIs8 12.8%
TOTAL 5.1%
Source: Kantar Media
1. Figures are based on the Kantar Media Stradegy multimedia ad expenditure database across all measured media, including: Network TV (6 networks); Spot TV (125 DMAs); Cable TV (71 networks); Syndication TV; Hispanic Network TV (4 networks); Consumer Magazines (225 publications);,Sunday Magazines (7 publications); Local Magazines (26 publications); Hispanic Magazines (17 publications); Business-to-Business Magazines (351 publications); Local Newspapers (147 publications); National Newspapers (3 publications); Hispanic Newspapers (49 publications); Network Radio (5 networks); Spot Radio; Local Radio (32 markets); Internet; and Outdoor. Figures do not include public service announcement (PSA) data.
2. Cable TV figures do not include Hispanic cable networks.
3. Spot TV figures do not include Hispanic stations.
4. Spanish Language TV includes 4 Hispanic broadcast networks, 4 Hispanic cable network and 71 local Hispanic TV stations.
5. Magazine media includes Publishers Information Bureau (PIB) data and reflect print editions of publications.
6. Newspaper media figures reflect print editions of publications.
7. Local Radio includes expenditures for 32 markets in the U.S.
8. FSI data represents distribution costs only.

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