Strong Quarter for TV Propels US Ad Spend to a 3.5% Increase in Q2

September 9, 2013

Kantar-percent-change-in-measured-ad-spend-Q2-2013-sept13US ad spending increased by 3.5% year-over-year in the second quarter of the year to reach $35.8 billion, dragging first-half expenditures up by 2% to $68.9 billion, per the latest figures from Kantar Media. TV’s 6.4% bump in spending buoyed the overall totals, with TV’s increase partly a result of NCAA Final Four basketball games being counted in the Q2 rather than Q1 figures. The researchers also note that the year-over-year gain is exaggerated by dampened spend in Q2 2012 as advertisers pulled back in advance of the Summer Olympics.

The total spending figures may actually underestimate growth, as Kantar’s online spending estimates only include display advertising, which the report says increased by 4.1% 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.)

  • TV

TV media spending was buoyed by a big increase for cable TV, up by 14.9% for the quarter as a result of more NBA playoff programming and higher primetime pricing. Network revenues also saw healthy growth of 4.9%, driven by a longer NBA championship series and the above-mentioned shift in timing for NCAA games from March to April.

Ad spending in Spanish Language TV continued to rise, although its 6.1% increase was softer than growth rates. Another segment that had been showing healthy growth rates, syndication TV, saw a moderate 1.2% decline in spend, while spot TV decreased by 3.5%, but would have been stable if excluding political advertising.

During the first half of the year, cable was the fastest-growing TV media segment (10.1%), followed by closely by Spanish-language TV (9.4%). Network TV (-0.6%), syndication (-1.1%) and spot (-2.9%) all saw moderate declines year-over-year during the first half, while TV as a whole was up by 3.3%.

  • Radio

While the Radio Advertising Bureau (RAB) pegged radio revenues as being flat in Q2, Kantar’s estimates have spending as down 2.2% from Q2 2012. Network radio experienced the fastest decline, of 19% (only a 4% decline according to the RAB), while local radio was down by 1.6%. National spot radio had a brighter quarter, with spending rising by 5.8%.

For the first half, spot radio grew by 5.8%, while local radio expenditures declined by 1.3% and network radio spending by 17.1%. Radio spending as a whole dipped by 1.9% during the first half.

  • Print

Print media spending was mixed – with magazines showing a slight uptick as newspapers continued their free fall. For the quarter, magazine media spending was up 1.6%, while newspaper expenditures fell by 3.6%. Both were marginal improvements from Q1.

Within magazine media, only B2B magazines saw a drop in spending (-3.7%) for the quarter, with local magazines (1.1%), consumer magazines (1.9%), Sunday magazines (4.1%) and Spanish-language magazines (14.5%) all enjoying some level of increase.

Within newspaper media, national newspapers rebounded from a poor first quarter to remain mostly flat (-0.5%) in the second quarter, although spending decreased by 4.6% for the first half. Local newspaper ad spend declined by 4.3% in the second quarter en route to a 4% decline for the first six months. Spanish-language newspapers continued to provide a bright spot in the newspaper market, up by 8% in Q2 and by 5.1% in the first half of the year.

  • Outdoor, FSIs, and Display

While TV drove the overall increases in ad spending for the quarter, outdoor advertising was actually the fastest riser, according to the Kantar figures. Outdoor advertising benefited from an increase in spending from local services, retail and restaurants, finishing the quarter with 7.4% year-over-year growth (the OAAA recently estimated the increase to be 5%). Q2’s growth was the 13th consecutive quarter of growth for the outdoor advertising sector, which saw ad revenues increase by 6% for the first half of the year.

Spending on free-standing inserts (which represents distribution costs only) grew by 2.8% in Q2 and have now increased by 3.3% for the first half of the year.

Finally, display ad spend rose by 4.1% in Q2 on the back of larger investments by financial service and telecom advertisers. Spending was up by 5.3% for the first-half period.

Top Advertisers and Verticals

Nine of the top 10 advertisers for the second quarter increased their spending on a year-over-year basis. Pfizer’s 54% boost brought it into the top 10 (#10), while top advertiser Procter & Gamble increased its spending by 35.3% to $805 million. AT&T was the second-largest advertiser (up 33.2% to $502 million), followed by L’Oreal (+4.6% to $398 million), Comcast (down 17.4% to $393 million) and GM (up 28% to $379 million).

Retail continued to be the largest advertising vertical, although expenditures were relatively flat at roughly $3.8 billion. Automotive was next (+6.9% to $3.6 billion), ahead of local services (+4.4% to $2.4 billion), telecom (+19.5% to $2.4 billion) and personal care products (+0.4% to $1.9 billion).

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

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