Ad Spending Flat in '07, per TNS

NEW YORK More evidence that the advertising market is stuck in low gear came today with TNS Media Intelligence's report that spending was up only 0.2 percent to $148.9 billion compared to a year ago. TNS had originally forecast 1.7 percent growth, a projection the company revised down from its original prediction. But as the year progressed, even 1.7 percent growth was too optimistic. Fourth-quarter spending fell 0.1 percent. Blame the worsening economy, causing advertisers to be more skittish about unleashing ad budgets. The top 10 advertisers spent $18.66 billion last year, a drop of 0.3 percent compared to 2006. Among the top 100 marketers, spending dropped 2.6 percent to $63.35 billion. The one exception was Procter & Gamble, which increased expenditures by 5.6 percent to nearly $3.5 billion."As a whole, the ad market remains stalled and is being engulfed by the spreading pessimism about general economic conditions," said Jon Swallen, svp, research at TNS. "For 2008, ad spending has been tracking in the narrow range, down 1 percent to plus 1 percent. We haven't turned the corner yet."Despite the Olympics and political spending anticipated for the second half of the year, the 4.2 percent growth forecast is looking shaky. "That feels a bit high right now. We see January up 1 percent; we thought the first half of the year would be up 3 percent," Swallen said.TV media declined 1.7 percent to nearly $65 billion. Spot TV took the biggest hit, down 10.2 percent to $15.6 billion. Cable TV was the only TV segment that grew, up 6.5 percent to $17.8 billion. As 2007 progressed, spending on newspapers and radio continued to decline, losing share to the Internet and magazines. Newspaper share dropped from about 20.5 percent in 2004 to 17.7 percent last year; spending dropped 5.6 percent to $26.4 billion. Radio declined 3.5 percent to $10.7 billion; share dropped from 7.8 percent in 2004 to 7.2 percent last year. With as much as $4 billion in auto dollars leaving the ad market, local TV also lost share, dropping from 13 percent in 2004 to 11.3 percent."It's a continuation of trends that have been in place for a couple of years. Newspapers have born the brunt of many changes, such as auto, telecom and retail brands shifting budgets to national," Swallen said. Internet display grew 16 percent to $11.31 billion. Also up were magazines with 5.5 percent growth to $30.3 billion, driven by consumer magazines, up 7 percent to $24.4 billion. Outdoor also posted healthy growth, up almost 5 percent to just over $4 billion.(Adweek's parent is the Nielsen Co., which competes with TNS.)

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Ad Spending Flat in '07, per TNS

Katy Bachman

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