U.S. Ad Spending Drops 1 Percent in Fourth Quarter to End 2011 Slightly Higher

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Kantar Media says that ad momentum has now slowed sequentially for five consecutive quarters, but it also highlights "resilient TV spending" and says the launch of "The X Factor" helped fourth-quarter network TV sales.

NEW YORK - U.S. advertising spending ended up rising only 0.8 percent in 2011 to $144.0 billion, ending the year with a 1 percent decline in the fourth quarter, according to data from research firm Kantar Media.

The drop in the final quarter was the first decrease since late 2009. Kantar also highlighted that since a post-recession peak in the third quarter of 2010, advertising growth rates have now slowed sequentially for five consecutive quarters.

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“The contrast of resilient TV spending and waning budget allocations to other traditional media was plainly evident at the end of 2011,” said Jon Swallen, senior vp research at Kantar Media Intelligence North America. “Some mature digital media formats were also touched by the year-end tide of reduced spending. Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly towards emerging and unmeasured digital platforms bears watching as 2012 unfolds.”

Television continued to lead ad market growth in the fourth quarter. Network TV ad expenditures rose 7.7 percent over the year-ago period, driven by strong pricing for football, a World Series that went to seven games and the launch of The X Factor, Kantar said. But for the full year 2011, network TV spending fell 2 percent.

Cable TV ad growth slowed to 2.4 percent "as higher demand from restaurants and retailers was offset by reductions from consumer packaged goods," the firm said. For the full year, cable's gain amounted to 7.7 percent. Spot TV expenditures fell 8.7 percent in the fourth quarter with the full year down 4.5 percent. Spanish language TV ad spending remained a bright spot, jumping 19.1 percent in the final quarter of 2011, leaving the full year up 8.3 percent.

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Ad spending for measured digital media dropped in the fourth quarter as paid search budgets fell 6.4 percent and display ad spending was down 5.9 percent. For the entire year, paid search declined 2.8 percent, while display rose 5.5 percent, Kantar said.
Spending by the 10 largest advertisers in 2011 reached $16.06 billion, down 2.8 percent, according to Kantar. For the ninth consecutive year, Procter & Gamble was the top advertiser, spending $2.95 billion down 5.4 percent.

Among the top 10 advertisers of 2011 are cable giant Comcast in the fifth spot with $1.58 billion in spending, up 11.3 percent, Time Warner, which ranks seventh with a 5.8 percent spending increase to $1.28 billion, and News Corp., which in the 10th spot spent $1.17 billion, down 14.1 percent.

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In other interesting Kantar data, the movie category wasn't in the top 10 ad categories of 2011, and Barry Diller's Internet powerhouse IAC was the top Internet advertiser with $316 million, up 28.9 percent, with Comcast ranking seventh with $203.7 million, up 31.8 percent.

Meanwhile, satellite TV operator Dish Network ranked third on a list of top advertisers in Hispanic media with $153.7 million in spending, up 71.2 percent.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

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