Ad dollars stay on the wane

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NEW YORK -- With automotive-related ad spending chilling over the past two years, the media industry has caught a cold.

Overall ad spending the first half of the year was slightly down compared to the same period in 2006, according to a report released Tuesday by TNS Media Intelligence. It's the second straight quarter that ad spending has declined, the first time that's happened since 2001.

Overall ad expenditures dropped 0.3% to $72.6 billion, TNS Media Intelligence said. Many of the major ad sectors -- including network TV, syndication, spot TV and newspapers -- showed declines during the period while the Internet, magazines and outdoor advertising were in positive territory. TV, which is a third of all advertising spending, was down 2% overall to $31.6 billion. Network TV dropped 4% compared to the first half of 2006, despite evidence the networks were selling more ad time with flat unit pricing as well as the fact that the departure of the WB and UPN and the addition of the CW and MyNetworkTV has had a negative impact on overall revenue. Cable TV was up 3% with evidence that money was shifting from general-market channels to niche networks, as some audience has leaked away from the bigger channels. Syndication dropped 5% while spot TV, which is hardest hit by the lack of the Olympics and political advertising as well as automotive, was down 5%.

Spanish-language TV was down 1% on comparisons to last year's World Cup, which boosted Univision alone by $120 million in revenues, most of it in the first half. But Swallen said that that $120 million was almost entirely incremental.

Doing well were Internet display ad spending, up 18%, to $5.5 billion and outdoor, up 4% to $1.9 billion.

TNS senior vp Jon Swallen said Tuesday that a large portion of the declines could be tied to sharp decreases in ad spending among automakers, particularly the Big Three domestic companies. General Motors, which has traditionally been one of the top two national advertisers in terms of ad spending, has been sharply cutting its budget over the past five quarters.

"They've taken almost a billion dollars out of the advertising marketplace and that money isn't coming back anytime soon," Swallen said. GM is now the fourth-highest ad spender with $958.9 million (down 25% quarter to quarter), behind leader Procter & Gamble (up 2% to $1.6 billion), AT&T Inc. (down 12% to $1.1 billion) and Verizon (up 9% to $1 billion). AT&T's spending comes off of comparisons to last year when it spent lots of money in a new advertising/branding campaign.
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