US Ad Spend Trends, by Medium, in Q2 2014

September 18, 2014

Kantar-Ad-Spend-Trends-in-Q2-Sept2014US ad spending inched up by 0.7% year-over-year in the second quarter to reach $35.6 billion, dragging down the growth rate for first-half expenditures to 3.1%, per the latest quarterly figures from Kantar Media. The analysis notes that Olympic advertisers reined in spending by 4% year-over-year during Q2, while those not advertising during the Olympics increased spend by 2%, with the latter considered a more appropriate indicator of core media spending trends.

The total spending figures may actually underestimate growth, as Kantar’s online spending estimates only include display advertising, which the report says increased by 6.2% for the quarter. (Given the recent growth trajectory of online ad spending, it’s more likely that online ad spending growth was somewhere in the double digits.)

The following is a breakout of ad spending trends, by medium, in Q2 and the first half of this year.

TV Media

TV media spending grew by 5% during Q2, buoyed by a sizable increase for cable TV. Cable TV expenditures increased by 9.3% year-over-year during the second quarter as a result of the World Cup and NCAA tournament semi-final games (shown on cable for the first time this year). Network revenues, by contrast, declined by 7.2% due to fewer March Madness and NBA playoff games.

Ad spending in Spanish Language TV soared by 41.5% during Q2, boosted by the beginning of the World Cup in June. Meanwhile, spot TV spending decreased by 0.5%, with political spending increases offset by a decline in spending by automotive and telecom advertisers.

During the first half of the year, Spanish-language TV was the fastest-growing TV media segment (30.6%), followed by cable TV (7.8%). Network TV (4.1%), spot TV (3.3%) and syndication (2.2%) all saw moderate increases year-over-year during the first half, while TV as a whole was up by 7.3%.

For a more detailed look at TV advertising spending – including an analysis of the segments receiving the most ad spend – see MarketingCharts’ Debrief on the TV industry, entitled “TV in Context: Viewing Trends, Ad Spending, and Purchase Influence.”

Radio Media

While the Radio Advertising Bureau (RAB) pegged radio revenues as being down by 3% in Q2, Kantar’s estimates have spending as declining by a slightly larger 3.6% from Q2 2013. Kantar Media’s data indicates that Hispanic local radio experienced the fastest decline, of 11%, while national spot radio was down by 6.2% and local radio (English language) lost ground to the tune of 3.6%. Network radio had a brighter quarter, with spending rising by 5.6%.

For the first half, network radio was mostly flat, up by 0.1%, while all other segments saw declines (-10.3% for Hispanic local; -4.1% for English-language local; -0.6% for national spot). Radio spending as a whole dipped by 3% during the first half.

Print Media

Print media spending decelerated during Q2 – with magazines down by 5.7% and newspapers continuing their free fall with a 10.4% year-over-year decline. Both were faster declines than seen during Q1, with overall first-half revenues down by 3.9% and 7.7%, respectively.

All magazine media segments saw a drop in spending during the second quarter, with Sunday magazines (-15.8%) the hardest hit. Hispanic magazines (-5.9%), consumer magazines (-5.2%), local magazines (-4.6%) and B2B magazines (-3.3%) all saw a decline in spending, while for the first half, Hispanic magazines were the only to experience an increase (+1.9%) in revenues.

Within newspaper media, national newspapers expenditures fell by 15.8% for the quarter, while local newspapers (-9.7%) and Hispanic newspapers (-4.5%) also saw significant decreases. Each of those segments also experienced a decline in spending for the first half of the year overall.

Outdoor, FSIs, and Display

Not surprisingly, online display was the fastest-rising medium in terms of growth rate, up 6.2% year-over-year in Q2. Even so, that result wasn’t as aggressive as in Q1, and overall H1 revenues for display grew by 9.7%.

Meanwhile, the outdoor advertising sector saw its first decline in the past 14 quarters, down by 1.6%. For the first half, outdoor ad expenditures were up by a modest 0.4%.

Finally, spending on free-standing inserts (which represents distribution costs only) grew by 1.3% in Q2 and increased by 2.8% for the first half of the year.

For a detailed look at the relative effectiveness of various advertising channels – including the demographic groups with which they have the greatest purchase influence – see MarketingCharts’ Debrief, “Advertising Channels With the Largest Purchase Influence on Consumers.”

Top Advertisers and Verticals

Seven of the top 10 advertisers for the first half of the year increased their spending on a year-over-year basis. Pfizer’s 25.1% boost was the largest of the top 10, moving it from the #10 spot in H1 2013 to the #6 spot in the first half of this year. By contrast, top advertiser Procter & Gamble decreased its spending by 17.4% to $1.3 billion. GM took AT&T’s place as the second-largest advertiser (up 22.6% to $929 million), followed by AT&T (-9.4% to $91 million), Comcast (down 1.2% to $772 million) and L’Oreal (down 9% to $728 million).

Retail continued to be the largest advertising vertical, although expenditures were relatively flat at roughly $7.2 billion. Automotive was next (-0.5% to $7 billion), ahead of telecom (+2.5% to $4.8 billion), local services (+6% to $4.8 billion), and financial services (+0.5% to $3.8 billion).

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

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