US Ad Spend Inches Up 0.9% Y-O-Y in Q2

September 11, 2012

US advertising spending increased 0.9% year-over-year in Q2 to reach $34.4 billion, slowing from Q1’s 2.9% year-over-year increase, according to September 2012 figures from Kantar Media. For the first half of the year, expenditures increased by 1.9% to $67.1 billion. (Online spending estimates only include display advertising). Spending among the 10 largest advertisers in Q2 stood at $3.58 billion, representing a 5.5% decrease compared to the previous year. Procter & Gamble maintained its top-ranked position, though its spending dropped by 13.2%. Among other top 10 advertisers, General Motor’s expenditures fell by 30.1% year-over-year, while Unilever and Toyota Motor Corp both increased spending significantly, by 48.6% and 22.7%, respectively.

Expenditures for the 10 largest categories grew by a modest 1.3% in Q1, to $21.5 billion. Retail was the top spending category with $3.84 billion in expenditures, up 0.9% from Q2 2011. Automotive was the next-largest, with expenditures of $3.37 billion, up 7.7% from a year earlier. Direct response registered the largest increase among the top 10 categories, of 6.5%.

TV Ad Spend Continues Solid Growth

Almost all forms of TV showed spending gains in Q2 2012, with total TV media expenditures up 4.4% year-over-year. Spending on cable networks rose by 4.2%, while network TV declined by 0.4%, which Kantar Media attributes to a change in timing which saw ad dollars for the NCAA Basketball Final Four games being counted in Q1 rather than Q2.

Ad spending in Spanish Language Television jumped 17.8% in Q1, following 20.7% growth in Q1. Syndication TV also followed up from its rapid Q1 growth with a 10% increase in Q2. Spot TV also gained ground, rising 4.6%, primarily due to political advertising.

For H1 overall, Spanish Language TV saw the largest year-over-year growth, of 19.1%, followed by syndication TV (12.8%), cable TV (5.7%), network TV, and spot TV (both at 3.5%). Total TV media expenditures were up 6% for H1.

A detailed examination of the US TV advertising market can be found in the following article: Data Dive: US TV Ad Spend and Influence.

Print Media Spend Still Falling

Further data from the Kantar Media report indicates that print media spending continues to fall, with newspapers and magazines experiencing year-over-year declines of 3.1% and 2.7% in Q2, respectively. (September figures from the Newspaper Association of America pegged US newspaper ad spending’s drop in Q2 at a more precipitous 6.4%.)

According to the Kantar Media report, within magazine media, Sunday magazines saw the largest drop in spend in Q2 (-7.6%), while consumer magazines and B2B magazines posted more moderate decreases, of 2.6%. Within newspaper media, national newspapers (-10.7%) experienced the largest fall, followed by local newspapers (-1.9%).

The Spanish language newspaper market performed better-than-average, though: spending on Spanish language magazines grew by 8.9%, although expenditures on Spanish language newspapers fell by 2.5%.

Overall, for H1, magazine ad spend fell 3% while newspaper ad spend dropped 3.5%. Spanish language magazines posted the fastest growth among magazine media (14.1%), while Spanish language newspapers was the only newspaper media category to post overall growth for H1, at 1%.

Network Radio Ad Spend Jumps 20% Y-O-Y

Contrary to print media’s overall spending drop in Q2, radio ad revenues grew by 1.9% year-over-year, led by a 20% rise in network radio investments. This growth offset a 3% decline in national spot radio spending. Local radio expenditures were relatively flat (0.6%).

For H1, radio ad revenues increased 1.4%, with network radio spend growing 21.4%, national spot radio expenditures dropping 3.2%, and local radio spend marginally down, by 0.5%.

Outdoor Ad Spend Up; Display Ad Expenditures Drop

Outdoor advertising expenditures increased 2.5% in Q2, marking the 9th consecutive quarter of year-over-year increases, per Kantar Media’s report. This result is less than recent figures from the Outdoor Advertising Association of America (OAAA), which reported 4.3% growth for the quarter. That study also found Q2 to be the 9th consecutive quarter with positive ad spending growth.

Meanwhile, Kantar Media reports that display ad investments continued to fall in Q2, dropping 5.4% year-over-year, following from a 4.1% drop in Q1.

Free standing inserts (FSIs) posted a 1.5% rise in expenditures. For H1 overall, FSIs were up 2.5%, while radio grew 1.4%, and display ad spending dropped 3.9%.

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