Ad Spending Grows for Fifth-Consecutive Quarter, but Rate of Gain Is Shrinking

Double-Digit Increases for Chrysler, Toyota and Ford

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U.S. ad spending totaled $32.5 billion in the first quarter of 2011, a 4.4% gain over the first quarter a year earlier, Kantar Media said Monday. That marks the fifth-consecutive quarter of year-over-year growth, but also the smallest rate of growth in those five quarters.

"With the advertising recovery in its second year, 2011 gets bench-marked against the elevated spending levels of last year and that makes for tougher comparisons," said Jon Swallen, senior VP for research at Kantar Media Intelligence, in a statement accompanying the first-quarter report.

"Despite slowing growth, there are positive signs," he said. "The market expanded by $1.4 billion during the first quarter, which nearly equals the amount of gain at the start of 2010 when the recovery began. In addition, a rising proportion of advertisers are increasing their ad budgets and this indicates spending growth is still rippling outward through the market."

Spending among the 10 largest advertisers in the first quarter totaled $4.3 billion, a 6.7% increase over the quarter a year before, as cutbacks of 5.9% at No. 1 Procter & Gamble, 24.4% at No. 5 Verizon and 11.1% at No. 6 Pfizer were overcome by spending growth at the others. No. 7 Chrysler increased its spending a whopping 58.6%, followed by No. 4 Comcast with a 47.7% boost, Toyota with a 30.3% increase and Ford with a 27.3% increase.

Top 10 Advertisers - Q1 2010

Spending among the 100 biggest advertisers, a group that accounts for nearly half of all ad spending, grew 4.8%, Kantar said.

Automotive, the largest category of ad spending, grew 23%, according to Kantar. Insurance, the 10th largest, grew the most, by 29%. The only declines came in No. 2 telecom, which slipped 2.1% from the first quarter of last year, and financial services, which declined 2.6%.

Among various media channels, ad spending grew 14.6% in online display, 6.2% in consumer magazines and 22 .3% in Spanish-language magazines but declined 7.5% in national newspapers and 1.1% in local papers, Kantar said. TV grew 5.3% on the whole as cable saw a 31.9% leap but network TV dropped 10.4%.

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