Total advertising expenditures increased 6.5 percent in 2010 and finished the year at $131.1 billion, according to data released today by Kantar Media, provider of strategic advertising and marketing information. Ad spending during the fourth quarter of 2010 was up 7.0 percent versus last year, propelled by the long-tail of small advertisers outside the Top 1000.
“The feel good headline is the ad economy grew by 6.5 percent in 2010,” said Jon Swallen, SVP Research at Kantar Media North America. “The more comprehensive assessment is that increased spending has not benefitted all sectors equally. While television media have recouped their losses from the 2009 advertising downturn, several other large segments are still 15 to 20 percent below their 2008 peaks.”
Measured Ad Spending By Media
TV ad spending remained robust through year end. Spot TV expenditures jumped 24.2 percent in 2010 due to the biennial surge in political advertising, a revived automotive category and a pronounced budget allocation shift among retail bank advertisers. Spanish Language TV spending rose 10.7 percent, assisted by the World Cup event. Higher sell out levels helped lift Cable TV expenditures by 9.8 percent and healthy demand from CPG marketers and credit card companies pushed Network TV spending ahead by 5.3 percent.
Internet display advertising increased 9.9 percent compared to the prior year, the second largest growth rate among media sectors. Outdoor advertising was close behind with a gain of 9.6 percent.
Improvements in Radio advertising were tilted towards local markets. National Spot Radio brought in 18.6 percent more ad dollars versus 2009 and Local Radio achieved a 4.9 percent increase. For each of these, higher spending was driven by the financial service, media and auto dealer categories.
Growth rates for print media trailed the overall ad market. Expenditures in Consumer Magazines were up a modest 3.3 percent while National Newspapers rose 2.7 percent, primarily due to publishing expansion at the Wall Street Journal. Ad spending in Local Newspapers sank 4.6 percent versus a year ago despite a small uptick in the volume of space sold. Local Newspaper spending has now declined for 21 consecutive quarters.
Measured Ad Spending By Advertiser
Spending among the ten largest advertisers in 2010 reached $16,345.8 million, a 3.7 percent increase compared to last year. Among the Top 100 marketers, a diversified group accounting for close to one-half of all measured ad expenditures, investments climbed 8.8 percent.
For the eighth consecutive year, Procter & Gamble was the top advertiser with spending of $3,123.9 million, up 17.7 percent compared to a year ago.
L’Oreal posted the largest rate of increase among the Top Ten with expenditures soaring 30.6 percent to $1,112.4 million. The company boosted marketing support broadly across its portfolio of mass market and prestige cosmetics brands.
Among auto manufacturers, Ford Motor upped its total ad budgets by 11.1 percent to $1,132.2 million. Rival General Motors reduced spending slightly, down 1.3 percent to $2,130.7 million. For both companies, exceptionally high levels of ad support in Q4 2009 timed to the leading edge of the auto sales rebound made for difficult comparisons in Q4 2010 and pulled down the full year growth rates.
AT&T raised expenditures by 12.1 percent, to $2,092.8 million as it continued to expand marketing efforts for its residential and mobile TV services. Verizon Communications trimmed ad spending 15.2 percent to $1,823.2 million.
Significant reductions were seen in the ad budgets of Pfizer (down 11.7 percent to $1,228.7 million) and Johnson & Johnson (down 7.5% to $1,139.7 million).
Measured Ad Spending By Category
Expenditures for the ten largest advertising categories increased 6.5 percent and totaled $74,125.1 million.
Automotive was the leading category in both dollar volume and growth rate, finishing 2010 at $13,026.0 million, up 19.8 percent. Category spending grew almost twice as fast as new vehicle sales (19.8 percent versus 11.1 percent), reflecting a fiercely competitive marketing environment for manufacturers and dealers.
Telecom was the second largest category with 2010 budgets rising a modest 4.0 percent to $8,751.5 million. Lower spending by wireless carriers and satellite TV companies was offset by higher outlays from cable TV service providers.
Package goods advertising remained active at year end as a broad range of manufacturers sought to defend market share against value-priced store brands and generics. Expenditures for Personal Care Products were up 11.7 percent to $6,161.0 million and the Food & Candy category rose 7.1 percent to $6,672.3 million.
Ad spending for Financial Services increased 6.0 percent to $7,689.7 million. In the aftermath of the financial crisis, marketing activity has picked up noticeably for products related to debt (credit cards, consumer loans) while advertising budgets for savings related segments have lagged (investments, retail banking).
Only two of the Top Ten categories experienced year-over-year declines. Direct Response budgets fell by 5.8 percent to $6,143.5 million. Pharmaceutical expenditures dropped 8.2 percent to $4,327.8 million, the lowest dollar amount for this category since 2003.
Kantar Media continuously monitors Branded Entertainment within network prime time and late night programming. The tracking identifies Brand Appearances and measures their duration and attributes. Given the short length of many Brand Appearances, duration is a more relevant metric than a count of occurrences for quantifying and comparing the gross amount of brand activity that viewers are potentially exposed to in the program versus the commercial breaks.
In the fourth quarter of 2010, an average hour of monitored prime time network programming contained six minutes, fifty seven seconds (6:57) of in-show Brand Appearances and 14:50 of network commercial messages. The combined total of 21:47 of marketing content represents 36 percent of a prime-time hour.
Unscripted reality programming had an average of 14:19 per hour of Brand Appearances as compared to just 4:50 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows had an average of 10:31 per hour. The combined load of Brand Appearances and network ad messages in these late night shows was 25:22 per hour, or 42 percent of total content time.
The top five brands ranked by total amount of Brand Appearance time were Chef Revival, Cybex exercise equipment, Yamaha music equipment, Bud Light beer and Asics footwear.