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TV Rules the Roost in Q1

Broadcast, cable control half of the $32.9 billion media market
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Thanks in large part to a robust sports market, first-quarter TV ad expenditures rose 8 percent versus the year-ago period.

According to a new report from Kantar Media, clients in Q1 invested $17.8 billion in TV time, up from $16.5 billion during the first three months of 2011. Leading the charge was broadcast TV, which boosted its ad sales revenue by 7 percent to $6.09 billion.

Cable networks also enjoyed a 7 percent lift, taking in $5.72 billion in sponsorship dollars.

Sports programming was the prime mover behind the increased national TV spend. According to Jon Swallen, chief research officer at Kantar Media North America, more than two-thirds of the dollar volume growth was generated by live sporting events—chief among these being the NFL Playoffs and Super Bowl and the NCAA Men’s Basketball Tournament.

Comparisons were helped by the college hoops timetable, as the Final Four Games were played on Saturday, March 31 (i.e., the final day of the quarter). A year ago, the Final Four aired on April 2.

Without all those sports dollars, the increases would have been much more modest. Q1 scatter pricing was muted, with CPM increases up in the high single digits over upfront rates. By comparison, the networks commanded premiums of as much as 40 percent in Q1 2011.

Spanish-language TV boasted the largest gains on a percentile basis, as ad sales at Univision, Telemundo and other outlets collectively rose 21 percent to $1.24 billion. Syndication dollars grew 16 percent to $1.29 billion, and spot buys inched up 3 percent to $3.42 billion.

According to Kantar, the top 10 broadcast advertisers upped their spend by 4 percent to $1.28 billion, although there were some striking year-to-year shifts among the individual accounts. Top spender AT&T slashed its Q1 broadcast investment by 23 percent ($179.1 million), while Anheuser-Busch InBev, Yum! Brands, Apple and Kraft went in the opposite direction.

AB’s network TV spend jumped 26 percent to $106.8 million, Yum! was up 32 percent to $98.4 million, Apple’s investment soared 43 percent to $93 million and Kraft upped its outlay by 29 percent to $92.5 million.

Meanwhile, the top 10 cable advertisers increased their investment by 2 percent to $861.5 million. Although Procter & Gamble reduced its spend by 18 percent, it still led all comers with $162.3 million in buys.

Long before it started making noise about canceling its Super Bowl buys and asking for 20 percent CPM rollbacks, General Motors began shifting its TV dollars. The automaker cut its Q1 broadcast spend 6 percent to $171.7 million, while increasing its cable investment 14 percent to $94.6 million.

In February, GM opted out of 50 percent of its Q2 upfront buys in broadcast and cable.

TV accounted for more than half (54 percent) of the $32.9 billion invested in media throughout the first quarter. And while the medium enjoyed a strong three months, the other major segments stumbled. Internet display, magazines and newspapers all declined 4 percent, per Kantar.

All told, the ad market grew 3 percent versus the prior-year period. Sequentially, this marked an improvement from Q4 2011, when expenditures dipped 1 percent, marking the first time in two years the U.S. ad market had failed to show signs of growth.

“After a sluggish start in January, the pace of measured ad spending quickly accelerated and grew at an average rate of more than 4 percent during February and March, the best performance in more than a year,” Swallen said. “Early figures from the second quarter indicate continued modest growth with improvement trickling down to media that have been lagging the overall advertising market.”

Expenditures for the 10 largest categories grew 3 percent to $20.7 billion. Automotive was the top category with $3.53 billion in media spend, down 2 percent from Q1 2011. No. 2 retail upped its investment 9 percent to $3.37 billion, while financial services demonstrated the biggest year-over-year increase, laying down $2.12 billion in measured media—a 10 percent uptick.