U.S. advertising market grew $73B in 1H06; Internet has 6.4% market share

Total U.S. advertising expenditures in the first six months of 2006 increased 4.1% to $73.0 billion as compared to the prior year period, according to TNS Media Intelligence. After a healthy 5.3% gain in the first quarter, the growth in total ad spending for the second quarter fell back more than expected and finished at 2.9%. 
MEDIA TYPE Jan-June 2006 Jan-June 2005
TELEVISION 44.3% 43.7%
MAGAZINES 19.6% 19.6%
NEWSPAPERS 18.6% 19.9%
RADIO 7.2% 7.6%
INTERNET 6.4% 5.6%
ALL OTHER 3.8% 3.5%
TOTAL 100.0% 100.0%
  • Spanish Language Media rose 20.5% to $2.40 billion. 
  • Internet display advertising rose 18.9% to $4.69 billion.
  • Network TV advanced 5.7% to $12.28 billion. 
  • Consumer Magazines finished with a 4.4% increase $10.90 billion.
  • Local Newspapers saw total expenditures erode by 3.9% to $11.65 billion. 
  • Radio media also lagged, down 1.4% to $5.26 billion.

Advertising Spending by Media: First Half 2006 vs. First Half 20051

MEDIA Jan-June 2006
(Millions)
Jan-June 2005
(Millions)
% CHANGE
NETWORK TV $12,277.3 $11,614.0 5.7%
NEWSPAPERS (LOCAL) $11,645.2 $12,120.2 -3.9%
CONSUMER MAGAZINES $10,902.5 $10,446.8 4.4%
CABLE TV $8,142.1 $7,935.8 2.6%
SPOT TV2 $7,691.8 $7,339.3 4.8%
INTERNET3 $4,692.0 $3,947.3 18.9%
LOCAL RADIO4 $3,554.3 $3,607.3 -1.5%
SPANISH LANGUAGE MEDIA5 $2,400.8 $1,992.1 20.5%
B-TO-B MAGAZINES $2,181.9 $2,207.0 -1.1%
SYNDICATION – NATIONAL $2,109.1 $1,994.6 5.7%
OUTDOOR $1,832.7 $1,693.9 8.2%
NATIONAL NEWSPAPERS $1,766.4 $1,668.5 5.9%
NATIONAL SPOT RADIO $1,226.0 $1,243.3 -1.4%
FSI's6 $954.3 $788.9 21.0%
SUNDAY MAGAZINES $891.0 $805.4 10.6%
NETWORK RADIO $484.1 $486.9 -0.6%
LOCAL MAGAZINES $226.3 $204.6 10.6%
TOTAL $72,977.9 $70,096.0 4.1%

Source: TNS Media Intelligence
1. Figures are based on the TNS Media Intelligence Stradegy multimedia ad expenditure database across all TNS MI measured media, including: Network TV; Spot TV; Cable TV (44 networks); Syndication TV; Hispanic Network TV; Consumer Magazines (220 publications);,Sunday Magazines (6 publications); Local Magazines (27 publications); Hispanic Magazines (31 publications); Business-to-Business Magazines (419 publications); Local Newspapers (143 publications); National Newspapers (3 publications); Hispanic Newspapers (54 publications); Network Radio; Spot Radio; Local Radio; Internet; and Outdoor. Figures do not include public service announcement (PSA) data.
2. Spot TV figures do not include Hispanic Spot TV data.
3. Internet figures do not include paid search advertising.
4. Local Radio includes expenditures for 34 markets in the U.S.
5. Spanish Language Media includes expenditures from Hispanic Network and Cable TV (Univision, Telemundo, Telefutura and Galavision); Hispanic Spot TV; Hispanic Magazines (35 publications); and Hispanic Newspapers (54 publications).
6. FSI data represents distribution costs only.
7. The sum of the individual media may differ from the total due to rounding.

Ad Spending by Advertiser
The top 10 advertisers in the first half of 2006 spent $9.29 billion, 0.6 percent less than the prior year period. Extending outwards to the top 50 advertisers, a group that accounts for one-third of total ad spending, expenditures fell 1.0 percent. Beyond the top 50, outlays advanced a healthy 6.8 percent, continuing a recent trend of middle-tier spenders lifting the overall ad market.

Procter & Gamble strengthened its grip on the top spot with $1.60 billion in spending, up 8.0 percent versus last year. Telecommunication companies continued their vigorous spending with AT&T up 32.9 percent to $1.18 billion and Verizon Communications up 13.3 percent to $948 million. Toyota Motor Corporation entered the top 10 with expenditures of $636 million.

General Motors pared its budgets by over $270 million in the second quarter and finished the half year at $1.29 billion, a 17.4 percent decrease. Johnson & Johnson reduced its expenditures by 21.3 percent and has now cut spending in four consecutive quarters. Declines were also registered at Time Warner (-13.5 percent), Walt Disney (-7.5 percent) and News Corp. (-8.1 percent). At each of these companies, the reductions came primarily from the movie divisions.

Top Five Advertisers: First Half 2006 vs. First Half 20059

ADVERTISER Jan-June 2006
(Millions)
Jan-June 2005
(Millions)
% Change
PROCTER & GAMBLE CO $1,601.4 $1,483.2 8.0%
GENERAL MOTORS CORP $1,285.4 $1,556.1 -17.4%
AT&T INC $1,177.3 $886.1 32.9%
VERIZON COMMUNICATIONS INC $948.0 $836.4 13.3%
TIME WARNER INC $857.1 $991.0 -13.5%

Source: TNS Media Intelligence
9. Figures do not include FSI, House Ads or PSA activity

Ad Spending by Category
The Telecommunications category maintained its top position with $4.70 billion in expenditures, up 16.6 percent. In addition to higher spending from AT&T and Verizon, aggressive marketing at Vonage and Deutsche Telekom also contributed to the gain.

Financial Services was the second largest category, growing 7.9 percent to $4.33 billion due to credit cards and investment brokers. Other categories posting strong results were Local Services & Amusements, up 11.8 percent to $4.26 billion, and Direct Response, up 7.4 percent to $3.16 billion.

Automotive, which occupied the top two spots in the rankings as recently as year end 2005, tumbled to the middle of the pack. Reductions were widespread among both factories and local dealers, pushing Foreign Auto advertising down 3.8 percent to $4.17 billion and Domestic Auto down 13.3 percent to $3.79 billion. Automotive advertising has declined in four consecutive quarters and the aggregate cutbacks during the past 12 months amount to $1.4 billion, or approximately 1 percent of total annual expenditures for all media.

Top Five Advertising Categories: First Half 2006 vs. First Half 200510

CATEGORY Jan-June 2006
(Millions)
Jan-June 2005
(Millions)
% Change
TELECOM $4,698.7 $4,030.0 16.6%
FINANCIAL SERVICES $4,329.5 $4,013.6 7.9%
LOCAL SERVICES & AMUSEMENTS $4,259.6 $3,811.4 11.8%
AUTO, FOREIGN $4,170.0 $4,336.3 -3.8%
AUTO, DOMESTIC $3,787.8 $4,369.5 -13.3%

Source: TNS Media Intelligence
10. Figures do not include FSI, or PSA activity.

Among mid-size categories outside the top 10, robust growth was exhibited by Real Estate (+31.3 percent to $1.67 billion); Insurance (+20.9 percent to $1.60 billion); and Computer Products (+11.7 percent to $1.25 billion).

Branded Entertainment
In the second quarter of 2006, an average hour of prime time network programming contained 2 minutes, 51 seconds (2:51) of in-show Brand Appearances and 18:12 of commercial messages. The combined total of 21:03 of marketing content represents 35 percent of a prime time hour.

Unscripted reality programming had an average of 7:04 per hour of Brand Appearances as compared to just 1:41 per hour for scripted entertainment programming, such as sitcoms and dramas. Late night network talk shows continue to have even higher levels, averaging 12:17 minutes per hour. The combined load of Brand Appearances and paid commercial messages in these shows exceeds 35 minutes per hour.

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