The US advertising market continued to sputter at the end of 2007 and finished the year with measured spending of $148.99 billion, up 0.2% from 2006, according to TNS media intelligence. Fourth-quarter expenditures fell 0.1% from a year earlier, it said.
“As a whole, the ad market remains stalled and is being engulfed by the spreading pessimism about general economic conditions,” said Jon Swallen, SVP of research at TNS media intelligence. “Fourth quarter performance was indicative of this malaise and early figures from 2008 suggest the growth rate for measured ad spending has not appreciably changed.”
Below, the data issued by TNS.
Measured Ad Spending by Medium
Internet display advertising continued its growth leadership, increasing 15.9% in 2007 to $11.31 billion in expenditures. Consumer Magazines registered a 7.0% gain to $24.43 billion on the strength of higher spending by consumer packaged goods marketers. Cable TV spending surged in the second half and finished 2007 at $17.84 billion, an increase of 6.5%. Outdoor advanced by 4.9% to $4.02 billion.
Among television media, full-year Network TV expenditures declined by 2.0% to $22.43 billion. Spot TV, in the face of difficult comparisons against record-setting levels of 2006 political advertising, plummeted 10.2% to $15.59 billion. Syndication TV fell 1.5% to $4.17 billion.
Ad spending declines in Newspaper and Radio media accelerated during the fourth quarter. For the full year, Local Newspapers were down 5.6% to $22.66 billion and aggregate Radio expenditures slipped 3.5% to $10.69 billion. Both media suffered from spending reductions by automotive, media and retail advertisers.
Share of Measured Spending by Medium
Directional shifts in measured ad spending are revealed by the share allocations of individual media types across time:
- Internet display advertising and Magazines continue to gain share, finishing 2007 at 7.6% and 20.4%, respectively, of total expenditures.
- The offsetting share declines have principally come from Newspapers and Radio.
- Local TV, with its two-year business cycle tied to Olympic and political advertising, has also been edging downwards.
Measured Ad Spending?- Top 10 Advertisers
The top 10 advertisers of 2007 spent a combined total of $18.66 billion in measured media, a drop of 0.3% compared with 2006.
Fourth-quarter spending by this select group was mixed, with three of the 10 registering double-digit percentage declines and four of the 10 posting double digit increases.
Among the top 100 marketers, a diversified group representing over 40% of the measured ad economy, 2007 spending fell 2.6%, to $63.35 billion. Outside the top 100, the segment, expenditures jumped 2.0%.
Procter & Gamble was again the largest advertiser with $3,486.5 million in spending, up 5.6% versus a year ago. Verizon Communications posted the highest growth rate among the top 10, up 11.1% to $2,136.5 million behind higher spending for its core wireless division and FiOS television service.
The largest decrease in the group was from General Motors; its 2007 outlays fell 7.7% to $2,106.4 million. However, aggressive model re-launches from its Chevrolet and Cadillac divisions contributed to a fourth-quarter spending surge of 24.5%.
Measured Ad Spending by Category
Expenditures for the 10 largest advertising categories grew a meager 0.9% in 2007, to $74.65 billion. In aggregate, they account for approximately one-half of all measured ad spending.
Financial Services holds the top spot with $9.12 billion of expenditures, a gain of 5.4%. Lower spending by credit card marketers and late-year cutbacks by mortgage and loan advertisers were more than offset by rising budgets from retail banks and investment brokers.
Telecom finished the year in second position, down 4.1% to $9.05 billion. Results were impacted by sizable spending reductions from AOL and Vonage.
Direct Response had the largest percentage gain among the top categories, up 17.0% to $7.45 billion. Personal Care Products advanced 10.1% to $6.18 billion. In both categories, growth was distributed widely across a large number of advertisers.
Automotive expenditures continue to lag. The Domestic Auto segment was down 7.1% to $7.05 billion, and Non-Domestic Auto shrunk 6.6%, to $8.12 billion. Automotive spending has now declined for 10 consecutive quarters.
In the fourth quarter of 2007, an average hour of monitored prime time network programming contained eight minutes, five seconds (8:05) of in-show Brand Appearances and 14:12 of network commercial messages. The combined total of 22:17 of marketing content represents 37% of a prime-time hour.
Unscripted reality programming had an average of 15:39 per hour of Brand Appearances as compared with just 4:47 per hour for scripted programs such as sitcoms and dramas.
Late night network talk shows had an average of 14:34 per hour. The combined load of Brand Appearances and network ad messages in these late night shows was exactly 30:00 per hour, or 50% of total content time.
TNS media intelligence monitors Branded Entertainment within network prime time and late night programming. The tracking identifies Brand Appearances and measures their duration and attributes.
Given the short length of many Brand Appearances, duration is a more relevant metric than a count of occurrences for quantifying and comparing the gross amount of brand activity that viewers are potentially exposed to in the program versus the commercial breaks.