US Ad Spend Trends in Q3

December 17, 2013

Kantar-percent-change-in-measured-ad-spend-Q3-2013-Dec13Kantar Media has released its latest look at US ad spending, finding that total expenditures in Q3 were down 1.9% year-over-year, an unsurprising result given last year’s outlays on the Summer Olympics and political campaigns. The researchers note that when removing those incremental dollars from the equation, ad spending growth in Q3 was in the 2.5-3% range, a figure it believes is more representative of the market’s health. For the year-to-date, total ad spending has inched up by 0.7% (figures not normalized) to $102.5 billion.

It’s worth noting as always with the Kantar Media figures that they may actually underestimate growth, as the online spending estimates only include display advertising, which the report says increased by 14.5% for the quarter. (Given robust growth in online video and mobile advertising, it’s likely that online ad spending growth is even higher.)

The following breaks out spending trends for the major media covered by Kantar.

  • TV

TV media spending was dragged down by a 17.9% decline in network TV spending and 15% drop in spot TV, with both suffering from comparisons to P&O spending last year.

Ad spending in Spanish Language TV continues to rise, up by 9.9% year-over-year and immune to the incremental dollars from last year. Cable TV spending also increased, by 5.1%, which Kantar attributes to “a creeping expansion of ad time,” while syndicated TV expenditures dipped by 0.5%.

For the year-to-date, TV expenditures as a whole are essentially flat, slipping by just 0.1%, with that result clearly dragged down by the 6.2% decline for Q3.

  • Radio

While the Radio Advertising Bureau (RAB) pegged radio revenues as being up by 1% in Q3, Kantar’s estimates aren’t so kind, seeing a 4.8% decline from Q3 2012. Network radio experienced the fastest decline, of 23.7% (“only” an 11% decline according to the RAB) – although Kantar notes that “the decline was exaggerated by a reduction in radio programming tracked.” National spot radio was down by 8.5%, while local radio was mostly flat, with a 0.4% increase.

For the year-to-date, radio spending as a whole is down by 3%.

  • Print

Print media spending was mixed – with magazines keeping up their grow pattern as newspapers continue their free fall. For the quarter, magazine media spending was up 4.3%, while newspaper expenditures fell by 3.5%.

Within magazine media, B2B magazines (-0.7%), local magazines (-0.1%), and Sunday magazines (-4%) all some saw degree of decline, but were more than offset by increases in spending on consumer magazines (5.5) and Spanish-language magazines (21.4%).

The newspaper media segments fared much worse: national newspaper ad spending dropped by 6.4%, and local newspaper expenditures were down 3.2%. Even Spanish-language newspapers, which have tended to be immune to newspaper’s overall declines, experienced a 1.1% drop, although they remain up by 3% for the year-to-date.

Overall, magazine ad spend is up 2.3% year-over-year for the Q1-Q3 period, while newspaper ad spend is down 3.5% for that period.

  • Outdoor, FSIs, and Display

Of the traditional media covered, outdoor advertising was the fastest riser, according to the Kantar figures. Outdoor advertising finished the quarter with 5.5% year-over-year growth (the OAAA recently estimated the increase to be 3.5%). Q3’s growth was the 16th consecutive quarter of growth for the outdoor advertising sector, per Kantar, with ad revenues increasing by 5.8% through the first three-quarters of the year.

Spending on free-standing inserts (which represents distribution costs only) grew by 2.4% in Q3 and have now increased by 3% for the year-to-date.

Finally, display ad spend increased by 14.5% in Q3 on the back of larger investments by financial service, telecom, and technology advertisers. Spending is now up by 8.6% for the Q1-Q3 period.

Top Advertisers and Verticals

Seven of the top 10 advertisers for the Q1-Q3 period increased their spending on a year-over-year basis. Pfizer’s 31.4% boost brought it into the top 10 (#10), while top advertiser Procter & Gamble increased its spending by 15.6% to almost $2.4 billion. AT&T was the second-largest advertiser (up 21.5% to $1.4 billion), followed by Comcast (-8.6% to $1.26 billion), GM (up 3.7% to $1.2 billion) and L’Oreal (up 10.9% to $1.16 billion).

By virtue of a 2.3% increase during the first 9 months of the year, automotive ranked as the top advertising vertical with just under $11 billion in spending. Retail dropped to a close second, with its 0.8% decline in spending bringing in to $10.93 billion in expenditures for the year-to-date. Local services (up 2.8% to $6.99 billion), telecom (up 11.7% to $6.91 billion) and financial services (-7.1% to $5.53 billion) rounded out the top 5.

About the Data: Kantar’s full explanation of its methodology can be found at the link above.

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