US Ad Spending in 2013: Trends by Medium, Advertiser Size

March 26, 2014

KantarMedia-US-Ad-Spend-Trends-by-Advertiser-Size-in-2013-Mar2014After growing by 3% in 2012, US advertising outlays inched up by 0.9% year-over-year in 2013 to reach $140.2 billion, according to the latest figures from Kantar Media. That registers as the 4th consecutive year of gains (which are not adjusted for inflation) and came in a year devoid of political and Olympic (P&O) spend. The data turns up some interesting trends: Kantar notes in particular that the market was “carried” by the largest advertisers, whose spending increased while the “long-tail” cut back.

Spending Trends by Advertiser Size

Measured ad spending (which tracks only display ad spending for online advertising) among the top 10 advertisers was up a solid 6.6% to hit almost $16 billion, such that these top advertisers accounted for upwards of 11% of all ad spend last year.

Procter & Gamble remained the largest advertiser, shelling out almost $3.2 billion last year, up 11.8% from a year earlier. GM moved up a spot to second on the back of a 10% rise (to $1.794 billion), with AT&T virtually on par with a 15.2% hike to $1.793.8 billion, as it also moved up a spot. Both overtook Comcast, which was one of only two advertisers in the top 10 to rein in spending. Comcast curtailed its spending by a moderate 2.8%, and was followed by L’Oreal, which remained in the 5th spot.

Among the top 10, #8 Verizon reduced spending the most (-13.3%), while #9 Pfizer grew its spending the most rapidly, by 26.8% as it cracked the top 10.

The top 100 advertisers – who together represented 45% of ad spending – increased spending by 3.3%, as did the mid-size advertisers (rank 101-1000), who accounted for another 33% share of total spend. The “long-tail” of small advertisers (ranked 1001+) reined in spending to the tune of a 6.6% drop, which Kantar attributes to “having fewer resources and faced with a slow-growth economy.” Overall, small advertisers accounted for 22% share of ad spend, down from about 23.4% last year.

Measured Ad Spend, by Medium

Kantar-percent-change-in-measured-ad-spend-in-2013-Mar2014Some of the media trends outlined in the report followed familiar trends: display spending growth was in the double-digits, while newspaper media continued to sink. But others – radio’s significant drop, and magazine’s uptick – are a departure from the 2012 results.

The following is a brief round-up of spending trends by medium.

  • TV

Overall, TV media spend was basically flat (-0.1%) from 2012, as an off-year for P&O spending was offset by increased ad spending on sports, though the extent to which these opposing forces contributed to individual TV sectors differed widely.

Spending on cable networks saw the strongest gain, of 7.3%, and was buoyed by increased ad loads and double-digit spending growth from the automotive, CPG, restaurant and telecom industries.

Network TV was down 3.4% for the year, as the withdrawal of Olympic dollars from the market outweighed gains in live sports expenditures. Spot TV fell more precipitously – by 8.1% – as it could not sustain the momentum from 2012’s political spend.

Ad spending in Spanish Language TV continued to rise, but at a slower rate. Its 2.9% gain was substantially lower than last year’s 15% increase. The same was true for syndicated TV expenditures, up 0.5% year-over-year in 2013 after 8% growth in 2012.

  • Radio

Unlike the Radio Advertising Bureau, which found radio ad spending to be flat last year, Kantar indicates that spending on this medium sank by 5.6%, a significant drop from last year’s 3% growth. The difference is likely related to Kantar’s finding that network spending plummeted by 15.9% due to a “reduction in the number of monitored networks.” The RAB had network spend down, too, but only by 4%.

The other radio segments fared a little better, though they too were in the red. Local radio expenditures fell by 4.1%, while national spot radio spending was down by 3.3%.

  • Print

Print media spending was a mixed bag last year, with magazines rebounding (+1.8%) as newspapers continued their free fall (-3.7%).

According to the Kantar Media report, within magazine media, Sunday magazines (-2.6%), B2B magazines (-1.7%) and local magazines (-0.5%) all saw a pullback of some degree, but were more than offset by gains in consumer magazine ad spend (+2.6%) and Spanish-language magazines (+2.3%).

That was just the latest indication that the Spanish language market continues to over-perform in the print sector. Ad spending on Spanish-language newspapers grew by 1.9%, bucking the overall trend, which found spending on local (-3.8%) and national (-3.6%) newspapers still falling.

  • Display, Outdoor, FSIs

While the news wasn’t good for newspaper and radio, spending on display, outdoor, and free-standing inserts all saw solid growth rates. Display spending increased by 15.7%, a particularly strong result considering that Kantar’s display ad figures don’t include video or mobile ads, two of the fastest-growing formats in the online space.

Outdoor advertising increased by 4.4%, boosted by “the continuing expansion of digital signage.” In fact, Kantar notes that digital outdoor spend has grown at a rate 5 times quicker than the medium as a whole during the past 4 years.

Finally, spending on free-standing inserts was up by 3.3%.

Top-Advertising Industries

The retail industry was again the largest spender, with expenditures inching up 0.2% to exceed $16 billion.

Behind retail, auto took the second spot with $15.2 billion in ad spend, up by 3.8% year-over-year. Auto was followed by telecom, which overtook local services due to its 8.2% increase in spending, to almost $9.4 billion. Financial Services rounded out the top 5 again.

Of the top 10 advertising verticals, telecom and insurance (+8.1%) showed the fastest growth rates, while direct response (-11.4%) and financial services (-4.1%) were the only to post a decline.

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

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