US Ad Spend Trends in Q1

June 25, 2014

Kantar-percent-change-in-measured-ad-spend-Q1-2014-june14Kantar Media has released its latest quarterly report on US advertising spend, finding that total expenditures in Q1 grew by 5.7% year-over-year to $34.9 billion, boosted by the Winter Olympics, which added an incremental $600 million in spending. Network TV was – unsurprisingly - a prime beneficiary, with roughly half of its 14.5% year-over-year growth owing to the Winter Olympics. Beyond TV’s healthy growth, other trends remained largely consistent with prior quarters. 

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 13% for the quarter. (By comparison, the IAB recently reported that online ad spending in the US grew by 19% in Q1.)

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

  • TV

TV media spending was buoyed by the 14.5% increase in network spending, which also benefited from more spending on the NFL playoffs and the Super Bowl. a 7% rise in spot TV expenditures, and an 18% hike in Spanish-language TV spend. Indeed, each measured type of TV saw a rise in expenditures, including spot TV (+7%), Spanish-language TV (+18%), cable TV (+6.2%) and syndication TV (+3.2%).

All told, TV media expenditures grew by 9.5% year-over-year in Q1.

  • Radio

While the Radio Advertising Bureau (RAB) pegged radio revenues as being flat in Q1, Kantar’s estimates aren’t as kind, seeing a 2.4% decline from Q1 2013. Network radio was down by 5.4% per Kantar (-8% according to the RAB), national spot radio grew 6.7% (-2% per the RAB). Local radio (-4.7%) and Hispanic local radio (-10.8%) both saw decreases, according to Kantar’s calculations. Those decreases were primarily attributed to a decline in spend by the retail, auto dealer and restaurant categories.

  • Print

After mixed results in 2013, print ad spending started the year off on the wrong foot, with magazine ad spend down 1.6% and newspaper spend down 5%. (See here for more on global newspaper ad spending trends.

Within magazine media, declines in ad spending for consumer magazines (-2%) and Sunday magazines (-5.6%) were not matched by increases in spending on B2B magazines (1.2%), local magazines (4.4%) and Spanish-language magazines (15.8%). Kantar notes that the decrease in consumer magazine ad spend owed to “severe reductions from the two largest magazine advertisers (Procter & Gamble and L’Oreal) who account for more than ten percent of total spending.”

Within newspaper media, national newspaper ad spending was flat, while Spanish-language newspaper expenditures inched up by 0.2%. Local newspapers were the only to experience a decline, by a substantial 5.8%.

  • Outdoor, FSIs, and Display

Outdoor advertising had another quarter of positive growth, according to the Kantar figures. Outdoor advertising finished the quarter with 2.6% year-over-year growth (the OAAA recently estimated the increase to be 1%). Spending on free-standing inserts (which represents distribution costs only) continued its solid growth, up by 4.4% during the quarter.

Finally, display ad spend increased by 13% in Q1 on the back of larger investments by financial, retail and insurance marketers advertisers.

Top Advertisers and Verticals

Eight of the top 10 advertisers in Q1 increased their spending on a year-over-year basis, with some doing so by a considerable amount. GM hiked its spending by 55.8% year-over-year to $593.4 million, in so doing becoming the second-biggest spender of the quarter, behind Procter & Gamble (-2.6% to $773.8 million). AT&T was the third-largest advertiser (up 4.9% to $535.5 million), followed by Comcast (+5.4% to $421.9 million) and Verizon (up 24.8% to $370.8 million).

Overall, the top 10 advertisers increased their expenditures by 14.1% year-over-year during Q1.

Automotive ranked as the top advertising vertical with roughly $3.76 billion in spending, up 7.7% year-over-year. Retail was next, with a modest 1.6% increase in spending bringing in to $3.41 billion in expenditures. Telecom (up 3.8% to $2.4 billion), local services (up 7.1% to $2.36 billion), and financial services (up 4.2% to $1.98 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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