Strong US Advertising Growth in Q1 2005

US ad expenditures for the first quarter of 2005 increased by 4.4% to $33.5 billion compared to the same time period in 2004. Though this is the smallest gain in advertising spend since the end of 2003, spending continues to increase at a faster rate than the GDP; just as it has in 10 of the last 11 quarters.

Local Magazines led all media categories in percentage growth, rising 26.2% to $104 million. Cable TV registered growth of 18.2% to $3.5 billion, taking market share from broadcast TV. Sunday Magazines grew 14.5% to $398 million (which is a reflection of organic growth and expansion in TNS MI measurement base) and Consumer Magazines increased by 9.5% to $4.7 billion. Internet advertising also continued to rise, posting an 8.2% increase over the previous year to $1.9 billion. By total dollar amount, Local newspapers and Network TV led all media at $5.9 billion and$5.8 billion, respectively.

Strong Direct Response and Restaurants

“It is clear that advertisers were fiscally more cautious in the first quarter of 2005, given mixed economic indicators and wavering consumer confidence,” said Steven Fredericks, president and CEO of TNS Media Intelligence. “Traditional stalwart categories such as Automobile, Banking and Retail Department Stores performed below market average, but those decreases were offset by increased spending by Direct Response and Restaurants,” added Fredericks.
Local and national newspapers, which account for 20% of total ad spend, have recently been faced with circulation declines and advertiser consolidation in key categories. As a result, these media turned in below-average growth, pulling down the total average.

Ad Spending by Media: First Quarter 2005 vs. First Quarter 2004

Media

First quarter 2005 in US $

First quarter 2004

in US $

Growth in %

NEWSPAPERS (LOCAL)

5,869.0

5,850.2

0.3

NETWORK TV

5,845.1

5,632.9

3.8

CONSUMER MAGAZINES

4,691.7

4,285.2

9.5

SPOT TV

3,664.3

3,849.1

-4.8

CABLE TV

3,510.1

2,970.0

18.2

INTERNET

1,948.1

1,800.5

8.2

LOCAL RADIO

1,612.7

$1,572.0

2.6

B-TO-B MAGAZINES

1,225.3

1,224.6

0.1

SYNDICATION - NATIONAL

987.6

947.8

4.2

HISPANIC MEDIA

915.6

865.3

5.8

NATIONAL NEWSPAPERS

801.8

783.6

2.3

OUTDOOR

725.9

705.2

2.9

NATIONAL SPOT RADIO

539.4

515.1

4.7

SUNDAY MAGAZINES

398.3

347.8

14.5

FSI's

396.8

392.7

1.0

NETWORK RADIO

224.8

232.2

-3.2

Source: TNS Media Intelligence


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