US ad spending jumps 5.1% in Q1: Kantar Media

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Total US advertising expenditures increased 5.1% year-over-year in the first quarter of 2010, totaling $31.3 billion in the period, according to marketing research firm Kantar Media.

However, the figures were mixed for the ad economy at large. Though ad spending for TV and the Internet saw increases of 10.5% and 5%, respectively, newspaper ad spending dropped 3.7% and magazine spending fell 3.2%.

Jon Swallen, SVP of research at Kantar Media, said the turnaround in the economy was a key factor in the ad spending upswing.

“I think marketers pre-set their ad spending in anticipation of stronger consumer activity, and that has begun to emerge in the first quarter,” he explained. “The sustainability of that stronger consumer activity, and by that extension, advertising recovery, is going to depend on how the general economy performs.”

Procter & Gamble held its position as the largest advertiser in the US with a 17.7% year-over-year increase in ad spend to $772.6 million. AT&T was runner-up with total advertising expenditures of $576.4 million, up 26.7% from a year ago.

Surprisingly, the troubled automotive sector preformed well. Its total ad spending jumped to more than $3.02 billion, a 18.6% increase. Though traditionally one of the four top advertising categories, the automotive sector has been in crisis mode since the 2008 Wall Street meltdown.

“The increase [in automotive ad spending] began in November 2009 and continued very strongly into the first quarter of the year, in tandem with new vehicle sales,” said Swallen. “Automakers have significantly boosted their advertising budgets with a prospect of further increases over the rest of the year as Chrysler comes back into the market with new models and new advertising support.”

Financial services advertising also surged, increasing 10.6% year-over-year to $2.27 billion. However, this surge in spending may be deceptive, according to Swallen.

“Retail bank advertising is still somewhat soft, but credit card advertising has been very robust,” he added. “The financial services sector has been emerging but at an uneven pace.”

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