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US adspend growth hits new high

News, 18 September 2015

NEW YORK: August saw advertising expenditure in the US record its highest monthly rise so far this year after the market was boosted by back-to-school marketing and its associated advertising on local TV networks, new data have shown.

Standard Media Index (SMI), the advertising measurement firm which reports on 80% of US ad agency spending, said ad volumes in the overall market rose 10% year-on-year in August.

Encouragingly, adspend increased across all media sectors except magazines, with out-of-home (+41%) and digital advertising (+21%) posting the largest year-on-year gains.

Within the digital category, social media (+87%), video (+33%) and internet radio (+26%) were the key drivers of growth for the month.

There was also relatively good news for the TV sector, according to SMI's latest data.

The overall TV market saw moderate growth (+3%) for the first time in six months, built largely on strong year-on-year rises in local TV (+17%) and cable TV (+3%), although broadcast TV ad revenues declined 6% compared to last year.

Meanwhile, adspend on newspapers increased by 11% while radio ad revenues rose 9% in August. Magazine spending, however, fell 10% year-on-year in August.

James Fennessy, chief commercial officer at SMI, attributed the weakened performance of broadcast TV to changes in programming schedules, such as the late start to the College Football season.

"A strong back-to-school market has delivered the most robust month for the ad market this year to date," he said.

"We saw big jumps across local and cable TV, and sectors like out of home, newspapers and radio delivered significant year-on-year gains, as marketers targeted consumers through local advertising.

"Digital continues to record big double-digit percentage gains and the majority of these dollars are coming from new advertisers, rather than stealing share from traditional media.

"Unfortunately, broadcast TV didn't join the party in August due to programming shifts which had a big impact on the performance of the sector."

Data sourced from SMI; additional content by Warc staff