'07 a banner year for Internet ads

But overall, sector 'meandering' with flat spending

The advertising economy stalled in the fourth quarter with spending flat, according to a Tuesday report from TNS Media Intelligence.

Meanwhile, Internet ad spending passed another important milestone. It now stands at 7.6% of total ad spending for 2007, ahead of radio for the first time. TNS only tracks display advertising and not search or broadband video.

U.S. ad spending in 2007 stood at $149 billion, flat compared with 2006, when TV in particular was boosted by a record political year and the Winter Olympics. Only a handful of categories were up, including cable TV (up 6.5%) as well as a few magazine categories and the Internet. Network TV was down 2% to $22.4 billion, while spot TV — hit by bad comparisons to political and Olympic ads — was down 10%.

The ad economy in 2007 showed no big signs of movement, TNS Media Intelligence senior vp Jon Swallen said.

"It's been trending within a fairly narrow range on a month-by-month and quarter-by-quarter basis," Swallen said. "It's a marketplace that's been meandering."

It also is indicative of a larger economy that advertisers have been working in, one with uncertainty about economic growth and consumer spending. TNS numbers from January show that the month will finish up about 1%, but it's still within the same narrow range, Swallen said.

National TV grew slightly and remained the largest share of ad spending, with 32% compared with 20% for magazines, 18% for newspapers, 11% for local TV and about 7% for the Internet and radio.

"Newspapers and local radio are the two media that are being hit hard and losing share of spend and ad dollars due to the Internet," Swallen said.

But at the same time, the Internet is being boosted by an increase in dollar spending from larger advertisers who are shifting more of their money there. Previously, the growth was mainly coming from smaller advertisers.

The nation's biggest advertiser for 2007, like 2006, remained Procter & Gamble, with a boost of 6% year-over-year to $3.5 billion. AT&T was second at $2.2 billion (down 4%), with Verizon up 11% to $2.1 billion, General Motors down 8% to $2.1 billion and Time Warner down 5% to $1.6 billion.
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