U.S. Ad Spending Up 4.1% in First Half

NEW YORK A slow second quarter and softness in the automotive category held ad spending to a modest 4.1 percent increase to $73 billion for the first half of the year, according to data compiled by TNS Media Intelligence.Following a 5.3 percent gain in the first quarter expenditures due to Winter Olympics spending, second quarter spending rose slightly less than 3 percent, below TNSMI's 3.8 percent forecast."Auto spending is becoming a huge drag on the market," said Steven Fredericks, president and CEO of TNSMI.Across all media, TNSMI reported a 13.3 percent drop in domestic auto spending and a nearly 4 percent decline in foreign auto spending for the first six month of 2006. General Motors alone cut spending by 17.4 percent to $1.2 billion in that period, compared to the first half of 2005.Auto spending in local newspapers was down by $610 million, a 25 percent decrease, contributing to a 4 percent overall ad decline in the first half to $11.6 billion. Consumer magazines saw a 22 percent drop in domestic auto advertising and an 11 percent drop in imported auto dollars over the same period. In spot TV, domestic auto spending was down 6.4 percent, though foreign improved 5.8 percent.TNSMI's estimates for individual media show advertisers allocating more dollars to the Internet at the expense of newspapers and radio.Now the sixth-largest medium tracked by TNSMI, the Internet's share of ad spending has grown from 5.5 percent to 6.5 percent, while radio's share has declined from 7.5 percent to 7.2 percent. Newspapers' share also dropped, from 20 percent to 18.5 percent. Television's share decreased from 44.3 percent to about 43.5 percent.Overall Internet ad spending grew 19 percent in the first half to nearly $4.7 billion."The Internet could grow at a greater percentage as the 50 largest advertisers start to get more confident in the Internet," said Fredericks. "The top 50 advertisers are shifting to the Internet at a slower rate than other advertisers, lagging the industry by two percentage points."Spanish-language media also had a good first half, thanks to the World Cup, growing 20.5 percent to $2.5 billion. Other media with double-digit gains were: freestanding inserts, which were up 21 percent, and Sunday and local magazines, each up approximately 10.5 percent.Network TV, the top-ranked media by overall ad spending, grew 5.7 percent to $12.2 billion. Other media posting gains were: consumer magazines (up 4.5 percent to $11 billion); spot TV (up 5 percent to $7.5 billion); national syndication (up 5.7 percent to $2.1 billion); and outdoor (up 8.2 percent to $1.8 billion). Spending growth on cable TV has begun to slow, up only 2.5 percent to slightly more than $8 billion.The improvement in national newspapers (where ad spending was up almost 6 percent to $1.7 billion) was entirely attributable to gains at The Wall Street Journal, where spending rose 20 percent due to the addition of its Saturday supplement. All sectors of radio (network, local and national spot) were down by a combined 1.4 percent, hit by both the shift to the Internet and the sluggish auto category.

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U.S. Ad Spending Up 4.1% in First Half

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