U.S. Ad Spend Grows 4%

NEW YORK U.S. ad spending grew by a modest 4 percent in 2006 to about $150 billion compared to the previous year, according to TNS Media Intelligence.

The modest spending growth occurred despite the fact that the top 50 advertisers decreased their spending levels by close to 2 percent all told, while the top 10 advertisers spent about 3 percent less, according to TNS, which released its final 2006 figures today.

And the moderate growth was inflated somewhat by political ads that added $1.5 billion in incremental spending. Discounting those dollars, actual growth was more like 3 to 3.2 percent, said TNS research svp Jon Swallen. “By historical standards that is tepid at best,” he said.

Worries about the general economy contributed to the suppressed spending levels, said Swallen, as did category specific issues, like domestic auto, where spending was down about $1 billion with General Motors accounting for most of the decline.

Procter & Gamble was the nation’s No. 1 advertiser last year, buying about $3.3 billion worth of ads, up about 3 percent from 2005. GM ranked second, but spent just $2.3 billion last year, a drop of 24 percent ($700 million) from the previous year.

Seventh-ranked DaimlerChrysler AG posted an 11 percent dip in spending to $1.4 billion while Johnson & Johnson, which sat out last year’s upfront market, spent just $1.3 billion on ads, down 20 percent.

By major media, the Internet was the fastest growing sector, with expenditures of almost $10 billion, up 17 percent from 2005. That doesn’t include search advertising, which Swallen estimates at $5 billion. TNS is working with Web publishers to develop standards and specifications for measuring search, although the timetable for doing so is still unclear, Swallen said.

Network TV spending was up only 2.5 percent last year, to about $23 billion, in part due to the demise of UPN and the WB, which were combined to form the CW network. The four major networks fared somewhat better, posting an average 3.2 percent climb in spending.