U.S. Ad Spending Growth Slows to 4.4% in First Quarter

Kantar Media reports the fifth consecutive quarter of growth despite a network TV decline and says the NBCUniversal deal made Comcast one of the top 10 marketers.

NEW YORK - U.S. advertising expenditures in the first quarter increased 4.4 percent to $32.5 billion, marking the fifth consecutive quarter of year-over-year growth, according to research firm Kantar Media.

But the gain was less pronounced than in previous quarters amid the continued ad market rebound, which makes for tougher comparisons.

The first quarter of 2010 had seen ad growth of 5.1 percent, followed by quarterly gains of 5.4 percent, 8.7 percent and 7.0 percent over the rest of last year.
"With the advertising recovery in its second year, 2011 gets benchmarked against the elevated spending levels of last year and that makes for tougher comparisons," said Jon Swallen, senior vp research at Kantar Media. "Despite slowing growth, there are positive signs. The market expanded by $1.4 billion during the first quarter, which nearly equals the amount of gain at the start of 2010 when the recovery began." Also, more marketers are increasing their ad budgets, "and this indicates spending growth is still rippling outward through the market," he added.

TV ad expenditures rose 5.3 percent in the first quarter, but trends differed within the space.

Network TV ad spending dropped 10.4 percent from the year-ago period due to the absence of Winter Olympics and college bowl games, according to Kantar.

In contrast, cable TV ad expenditures jumped 31.9 percent, driven by the expansion of NCAA men's basketball tournament coverage onto networks owned by Time Warner's Turner unit and a consolidation of major college football bowl games at ESPN.

Syndication TV spending rose 16.5 percent, while Spanish-language TV improved 0.8 percent, and spot TV ad spending declined 1.2
Internet display ad spending shot up 14.6 percent in the first quarter as Kantar cited strong demand by automotive, media and travel advertisers.

The company said the ad spending pace in radio "softened a bit" during the opening quarter of 2011 as total radio ad revenue was 1.3 percent higher. Local radio was up 3.4 percent, while national spot radio decreased 3.3 percent.
The 10 largest advertisers in the first quarter spent $4.28 billion, up 6.7 percent, with Procter & Gamble retaining its top position with $719.8 million, down 5.9 percent.

Kantar said that four auto advertisers made the top 10, the first time this has happened since the first quarter of 2004.
Meanwhile, cable giant Comcast entered the top 10 list as number four thanks to its NBCUniversal acquisition and "folding that division's hefty movie ad budgets into its corporate totals," Kantar said. Comcast's ad expenditures rose 47.7 percent to $454.5 million.

No other media or entertainment company cracked the top 10 for the quarter. In the year-ago period, News Corp., Time Warner and Walt Disney featured in the top 10.

Among ad categories, auto was the top sector with $3.7 billion of spending, up 23.0 percent. Just like in the first quarter of 2010, the movie industry didn't make the top 10.

Email: Georg.Szalai@thr.com

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