Adspend rises in US

14 June 2011

NEW YORK: Major brand owners such as General Motors, AT&T and L'Oréal continue to boost their US adspend, but Procter & Gamble has cut back in this area, new figures show.

Research firm Kantar Media estimated expenditure levels rose by 4.4% annually in the opening three months of 2011, standing at $32.5bn.

This is the weakest acceleration rate in four quarters, according to Jon Swallen, Kantar Media's svp, research.

"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," he said.

"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."

"In addition, a rising proportion of advertisers are increasing their ad budgets."

Procter & Gamble, the FMCG giant, trimmed its related costs by 5.9% year on year, reaching $719.8m. But telecoms provider AT&T increased its spend by 6.9% to $612.2m.

Automaker General Motors' investment jumped 1.3% to $542m, while Comcast bettered Q1 2010 by 47.7%, to $455m. This sharp increase was primarily due to the media firm's takeover of NBC.

By contrast, communications conglomerate Verizon's expenses fell 24.2%, registering $389.3m, and pharma group Pfizer recorded an 11.1% decline, on $349.9m.

Chrysler's outgoings rose 58.6% to $319.7m and fellow car manufacturer Toyota surged 30.3%, coming in at $307.9m, ahead of mutual rival Ford, with $299.2m, a 27.3% improvement.

Beauty specialist L'Oréal increased its expenditure levels by 14.1%, allocating $284.7m to supporting its portfolio in the first quarter.

As a whole, the top ten's combined advertising resources approached $4.3bn after a 6.7% expansion on an annual basis.

The 100 biggest spenders, accounting for almost 50% of ad revenues, similarly raised aggregate totals by 4.8%.

By medium, television ad sales climbed 5.3%, as growth of 31.5% for cable and 16.5% for syndicated national stations were partly offset by 10.4% and 1.2% drops for network and spot TV respectively.

AT&T topped the TV buying charts, delivering $458.8m, a 6.7% increase, as Procter & Gamble witnessed a 5.3% decrease, to $439.5m.

General Motors claimed third, augmenting its outlay by 15.2% to $383.6m, Comcast's expenditure rose by 74% and hit $275.3m, and Chrysler dedicated an extra 63.9% of funds to this channel, on $244.9m.

Newspapers saw demand fall 2.1%, as local, national and Spanish-language publications all endured a softening of interest.

Elsewhere, outdoor grew 12.5% and radio attracted an additional 1.3% in ad dollars, entirely thanks to local stations, with national and network equivalents off year on year.

Magazines enjoyed a 4.5% improvement, driven by Hispanic, consumer and business-to-business titles, given Sunday and local alternatives both slackened.

Once again, P&G reined in activity here, by 6.4% to $232.7m, but L'Oréal followed the opposite strategy, up 12.5% on $125.5m.

Looking online, display secured a 14.6% gain, buoyed by Verizon's 126% uptick to $84.5m, and Progressive Corp's 180.7% lift to $66.6m.

Carmakers General Motors and Honda also licensed impressive expansions, to $60.6m and $54.4m, while credit ratings expert Experian was flat on $65m, and P&G's investment fell 2.2%, to $43.5m.

In category terms, automotive spending leapt 23%, attaining $3.7bn, telecoms experienced a 2.1% decline, to $2.2bn, and financial services dropped 2.6%, falling below $2bn.

Retailers - excluding department, home furnishing and building supply stores - slipped 2.3%, to $1.7bn, just ahead of food and candy, growing by 4.7%.

Direct response, restaurants, personal care and insurance brands all boosted their outgoings, as the ten largest sectors served up a cumulative 8% increase, to $19.1bn.

Data sourced from Kantar Media; additional content by Warc staff