Ad Spending By Media
Spanish Language Television, leveraging the World Cup event, experienced a 19.1 percent increase in ad spending to $3.22 billion. Internet display advertising posted a 17.9 percent gain to $7.15 billion for the nine month period. Spot TV, propelled by third quarter political advertising, advanced 6.3 percent to $11.95 billion.
Other TV media continued to experience soft demand during the third quarter that dampened year-to-date performance. Network TV finished the period with $16.65 billion in expenditures, up 3.8 percent. Cable Network ad spending of $12.14 billion was a 3.3 percent improvement over same period in 2005.
Local Newspapers saw expenditures for their print editions fall by 3.7 percent to $17.50 billion. Radio media also lagged, down a combined 1.1 percent to an aggregate of $8.09 billion.
Share of Spending By Media
The Internet continues to grow its share of total advertising expenditures. For the first nine months of 2006, the Internet accounted for 6.6 percent of total ad spending, up from 5.8 percent a year ago. Newspapers lost 1.3 share points over this period, slipping to 18.7 percent of expenditures and falling behind magazines.
Ad Spending by Advertiser
The top 10 advertisers in the first nine months of 2006 spent $13.55 billion, unchanged from the prior year period. Extending outwards to the top 50 advertisers, a group that accounts for one-third of total ad spending, expenditures declined 1.0 percent. Beyond the top 50, outlays advanced a healthy 6.7 percent, continuing a recent trend of middle-tier spenders lifting the overall ad market.
Procter & Gamble maintained its spot atop the rankings with $2.46 billion in spending, up 7.0 percent versus last year. Telecommunication companies continued their aggressive spending with AT&T up 29.3 percent to $1.65 billion and Verizon Communications up 13.9 percent to $1.45 billion.
Leading automotive manufacturers remain a portrait of contrasts. General Motors followed up a second quarter reduction of $270 million with a further cut of $188 million in third quarter. The company’s year-to-date spending of $1.75 billion is off 20.9% from 2005. Daimler Chrysler modestly increased its advertising in third quarter but for the full nine month period its outlays are down 11.2 percent to $982 million. In contrast, Ford Motor Company and Toyota Motor continued to spend vigorously, registering year-to-date gains of 12.2 percent and 9.5 percent, respectively.
Advertising expenditure declines were posted at Time Warner (-14.8 percent), Walt Disney (-4.2 percent) and News Corp. (-7.5 percent). At each of these companies, the reductions came primarily from the movie divisions.
Ad Spending by Category
Heated competition within the Telecommunications category kept this sector in the top position with $6.85 billion in expenditures, up 13.8 percent. In addition to higher spending from AT&T and Verizon, aggressive marketing by Comcast, Deutsche Telekom and Vonage also contributed to the gain.
Local Services & Amusements became the second largest category, growing 11.0 percent to $6.43 billion. This sector is a potpourri of comparatively small advertisers outside the Top 500 rankings but its collective heft and multi-media budgets have made it an important contributor to the overall advertising economy.
Direct Response (+7.3%), Financial Services (+5.3%) and Restaurants (+4.0%) each posted modest gains.
Automotive category spending remained soft through the first three quarters of 2006. Higher outlays at Ford Motor Company and Toyota Motor were not enough to offset widespread reductions elsewhere. Foreign Auto advertising was down 2.7 percent to $6.34 billion and Domestic Auto fell 11.3 percent to $5.58 billion. Automotive advertising has now declined for five consecutive quarters.
Branded Entertainment
TNS Media Intelligence continuously 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 in the commercial breaks.
In the third quarter of 2006, an average hour of monitored prime time network programming contained 2 minutes, 10 seconds (2:10) of in-show Brand Appearances and 18:19 of commercial messages. The combined total of 20:29 of marketing content represents 34 percent of a prime time hour.
Unscripted reality programming had an average of 6:33 per hour of Brand Appearances as compared to just 0:47 per hour for scripted entertainment programming, such as sitcoms and dramas. Late night network talk shows continue to have even higher levels, averaging 7:48 minutes per hour. The combined load of Brand Appearances and paid commercial messages in these shows exceeded 29 minutes per hour in the third quarter.
