“Ad spending growth sputtered during the second quarter and was unable to sustain its early year momentum,” said Jon Swallen, Chief Research Officer at Kantar Media North America. “The advertising market is mirroring the tepid, slow growth performance of the general economy. Third quarter results will get a short-term boost from the Summer Olympics and political advertising but sustained long-term improvement will probably be linked to the health of consumer spending on the goods and services that marketers provide.”
Measured Ad Spending By Media
Television continued to lead the ad market in the second quarter of 2012, with overall growth of 4.4 percent. Cable TV expenditures rose 4.2 percent and growth was driven by sports programming and networks with larger audience ratings. Network TV spending was down 0.4 percent and comparisons were hurt by a timing shift that moved ad money for NCAA Final Four games out of April and into the prior quarter.
Spot TV expenditures increased 4.6 percent, lifted by a first wave of political money that began pouring into a handful of swing states crucial to the Presidential race. Double digit growth for spot TV spending in these select geographic areas was a marked contrast to the 2-3 percent growth rate for all other spot TV markets.
Spanish Language TV budgets jumped 17.8 percent on increases from direct response marketers, consumer package goods and auto manufacturers. Spending on Syndication TV rose 10.0 percent, reflecting a combination of audience ratings performance and more hours of programming.
There were isolated pockets of growth beyond the television sector. Network Radio spending rose 20.0 percent but comparisons were inflated by the addition of more radio programming to Kantar Media’s monitoring. Expenditures in Outdoor media rose 2.5 percent, the ninth consecutive quarter of year-over-year increases, and were spurred by healthy gains from local retail and service businesses.
Internet Display advertising fell 5.4 percent in the second quarter. Spending totals, which do not include either video or mobile ad formats, were impacted by a reduced volume of ad impressions with some offset from higher average CPMs.
Print media continued to lose ground. Ad spending in Sunday Magazines declined 7.6 percent and Consumer Magazines dropped 2.6 percent due to steep cutbacks from pharmaceutical companies and auto manufacturers. Local Newspaper budgets were down 1.9 percent as weaker spending by financial services, travel and telecom marketers erased increases from retailers and auto dealers. National Newspapers suffered spending reductions across key advertising categories as its total expenditures tumbled 10.7 percent during the quarter.
|Percent Change in Measured Ad Spending1|
— Media Type
(Sectors and types listed in rank order of spending)
|April – June|
2012 vs. 2011
2012 vs. 2011
|— Cable TV2||4.2%||5.7%|
|— Network TV||-0.4%||3.5%|
|— Spot TV3||4.6%||3.5%|
|— Spanish Language TV4||17.8%||19.1%|
|— Syndication – National||10.0%||12.8%|
|— Consumer Magazines||-2.6%||-3.2%|
|— B-to-B Magazines||-2.6%||-1.6%|
|— Sunday Magazines||-7.6%||-6.1%|
|— Local Magazines||0.5%||3.3%|
|— Spanish Language Magazines||8.9%||14.1%|
|— Local Newspapers||-1.9%||-2.7%|
|— National Newspapers||-10.7%||-9.3%|
|— Spanish Language Newspapers||-2.5%||1.0%|
|INTERNET (Display Ads Only) 7||-5.4%||-3.9%|
|— Local Radio 8||0.6%||-0.5%|
|— National Spot Radio||-3.0%||-3.2%|
|— Network Radio||20.0%||21.4%|
Source: Kantar Media
|1.||Figures are based on the Kantar Media Stradegy™ multimedia ad expenditure database across all measured media, including: Network TV (5 networks); Spot TV (731 stations in 125 DMAs); Cable TV (76 networks); Syndication TV; Hispanic Network TV (4 networks); Consumer Magazines (198 publications); Business-to-Business Magazines (348 publications); Sunday Magazines (8 publications); Local Magazines (31 publications); Hispanic Magazines (18 publications); Internet display (2,865 sites monitored at least one year); Local Newspapers (133 publications); National Newspapers (3 publications); Hispanic Newspapers (47 publications); Local Radio (33 markets); Network Radio (6 networks); National Spot Radio (205 markets); and Outdoor. Figures do not include public service announcements (PSA) or house advertising|
|2.||Cable TV figures based on 72 English language networks and do not include any Hispanic cable networks|
|3.||Spot TV figures based on 659 English language stations and do not include any Hispanic stations|
|4.||Spanish Language TV includes 4 Hispanic broadcast networks, 4 Hispanic cable networks and 72 local Hispanic TV stations|
|5.||Magazine media includes Publishers Information Bureau (PIB) data and reflect print editions of publications|
|6.||Newspaper media figures reflect print editions of publications|
|7.||Internet expenditures reflect display advertising only. Video ad formats and mobile ad formats are specifically excluded.|
|8.||Local Radio reflects expenditures for 33 markets in the U.S. and the data are provided by Miller, Kaplan, Arase & Co.|
|9.||FSI data represents distribution costs only|
Measured Ad Spending By Advertiser
Spending among the ten largest advertisers in the second quarter of 2012 was $3,578.0 million, a 5.5 percent decrease compared to a year ago. Among the Top 100 marketers, a diversified group accounting for more than two-fifths of all measured ad expenditures, budgets rose 1.1 percent.
Lower spending from the Top Ten group was most pronounced for a trio of advertisers (AT&T, General Motors, Procter & Gamble) that had expensive TV sponsorship positions in the Summer Olympics. Some of their second quarter reductions represent a deferral of spending into July and August to support Olympic marketing programs. Because of this timing phenomenon, the Top Ten advertisers are a less reliable benchmark when analyzing the Q2 ad marketplace.
Procter & Gamble was the top-ranked advertiser in the period, with measured spending of $577.3 million, down 13.2 percent. It was the sixth consecutive quarterly decline for P&G and is consistent with company announcements that it plans to tighten marketing budgets and shift more money out of traditional media.
The largest percentage drop among the Top Ten marketers came from General Motors which slashed its expenditures 30.1 percent, to $291.9 million. GM’s annual rate of measured ad spending is now at its lowest level in over a decade. By contrast, Toyota Motor spent $285.0 million in the second quarter, an increase of 22.7 percent compared to the year ago period when operations were severely curtailed by the Japanese earthquake and tsunami.
Ad expenditures for the two largest telecom marketers continued to move downward. AT&T expenditures fell 21.0 percent, to $375.5 million and Verizon Communications cut its media budgets by 14.7 percent, to $326.9 million.
Unilever entered the Top Ten rankings by spending $278.3 million, a 48.6 percent jump. The company raised marketing support broadly across its brand portfolio. Media expenditures at Comcast increased 12.8 percent and reached $469.7 million on higher budgets from its movie studio division. L’Oreal investments rose 9.0 percent to $377.8 million as the company continued to aggressively support its core cosmetics and hair care brands.
|Top Ten Advertisers:|
|Rank||Company||April-June 2012 ($ Millions)||April-June 2011 ($ Millions)||% Change|
|1||Procter & Gamble Co||$577.3||$665.1||-13.2%|
|5||Verizon Communications Inc||$326.9||$383.2||-14.7%|
|6||Time Warner Inc||$298.0||$342.2||-12.9%|
|8||General Motors Corp||$291.9||$417.5||-30.1%|
|9||Toyota Motor Corp||$285.0||$232.3||22.7%|
Source: Kantar Media
1. Figures do not include FSI, House Ads or PSA activity
2. The sum of the individual companies can differ from the total shown due to rounding
Measured Ad Spending By Category
Expenditures for the ten largest categories grew 1.3 percent in the second quarter of 2012 to $21,248.1 million.
Retail was the top category with expenditures of $3,837.4 million in the period, up just 0.9 percent versus a year ago and a sharp slowdown from 8.6 percent growth in the first quarter of 2012. Higher spending by department store brands was offset by declines from home improvement and home furnishing stores.
Automotive was the second largest category by dollar volume, with media spending of $3,373.5 million – a 7.7 percent increase. Dealer ad budgets rose 16.8 percent while manufacturers spent 2.2 percent more. Category growth was primarily attributable to Toyota and Honda, which could easily demonstrate growth compared to 2011, when their production and marketing activities were at a fraction of normal levels due to the earthquake and tsunami. Apart from Toyota and Honda, aggregate spending by the rest of the auto industry was flat in Q2.
Second quarter expenditures for Personal Care Products increased 3.8 percent to $1,897.3 million, paced by competition among leading marketers of cosmetics, hair care and skin care products. Media investments within the Restaurant category were up 2.1 percent to $1,525.7 million, aided by major repositioning campaigns from Burger King and Wendy’s.
Telecom ad expenditures were down 2.4 percent to $1,990.9 million. Category performance remains divided, with advertising budgets from wireless service providers wilting under the weight of slowing subscriber growth and rising capital investments for upgrading networks while TV service providers continue to raise their media budgets.
Ad spending in the Financial Services category turned sluggish during Q2, falling 3.4 percent to $1,921.9 million on reductions from credit card issuers and ongoing weakness within the Consumer Banking segment.
After an extended run-up that began during the 2009 recession, expenditures for Food & Candy are now steadily falling back. Q2 continued the pattern as spending dropped 5.5 percent to $1,538.9 million.
|Top Ten Advertising Categories:|
|Rank||Category||April-June 2012 ($ Millions)||April-June 2011 ($ Millions)||% Change|
|6||Personal Care Products||$1,897.3||$1,827.9||3.8%|
|8||Food & Candy||$1,538.9||$1,627.8||-5.5%|
|10||Travel & Tourism||$1,192.7||$1,231.8||-3.2%|
Source: Kantar Media
1. Figures do not include FSI or PSA activity
2. The sum of the individual categories can differ from the total shown due to rounding
About Kantar Media
Kantar Media provides strategic advice and competitive intelligence to the world’s leading brands, publishers, agencies and industry bodies, helping them navigate and succeed in a rapidly evolving media industry. This includes analysis of paid media opportunities; counsel on brand reputation, corporate management and consumer engagement through owned media; and, evaluating consumers’ reactions in earned media. Kantar Media provides clients with a broad range of insights from audience research, competitive intelligence, vital consumer behavior and digital insights, to marketing effectiveness and online influence. Our experts currently work with 22,000 companies tracking 3 million brands in 50 countries. www.KantarMediaNA.com.