Hitmetrix - User behavior analytics & recording

Q1 DRTV spending up slightly as overall ad expenditures grow 4.4%

US direct response TV advertising spending increased 2% year-over-year to $1.59 billion in the first quarter of 2011, according to a June 13 Kantar Media report. Industry-wide US advertising expenditures increased 4.4% in Q1, compared with the prior year, to $32.5 billion, according to the New York-based media measurement firm and WPP Group subsidiary.

Internet display advertising spending, which increased 14.6% year-over-year in the US during Q1, grew more than any other sector. TV, outdoor, radio and magazine ad spending all increased during the period, while newspaper spending decreased 2.1% and free-standing insert advertising spending dropped 17.5%, year-over-year.

“Internet display advertising is very robust,” said Jon Swallen, SVP of research at Kantar Media, and the author of the report. “There’s been so much attention paid to digital video and search. Those have been the sexy performers over the past two years. Display advertising was expected to diminish, but what we’re seeing is that it still has quite a bit of life left to it.” 

Swallen said the spending trend lines have been “sharply delineated over the past couple years” as a “two track market” has emerged.

“There’s an upper tier growing rapidly that includes TV and Internet,” said Swallen. “And the second tier is everything else.”

Spending by the 10 largest advertisers in the first quarter was $4.2 billion, a 6.7% increase compared with the prior year.  

For the first time in seven years, four of the top 10 spenders were auto companies. Chrysler Group increased its ad spending 58.6% to $319 million, while Toyota boosted ad spending 30.3% to $308 million. Ford Motor Co. increased ad spending by 27.3% to $299 million, while General Motors Corp. expanded ad spending 1.2% to $542 million, according to the report.

“Automotive ad spending is driven, No. 1, by the pace of new car sales and, No. 2, by the pace of new model introductions,” said Swallen. “The automotive sales market is quite strong, but just as significantly, there has been a larger-than-usual number of new model introductions and rollouts over the past six months.”

Procter & Gamble, which has topped Kantar’s annual list of largest advertisers for eight consecutive years, spent more than any other company in the first quarter ($719.8 million) despite cutting advertising costs by 5.9%.

Verizon, meanwhile, cut ad spending more than any other top 10 marketer in Q1. The telecommunications company, the No. 5 advertiser in terms of spending, slashed its budget 24.4% to $389.3 million, compared with the same period last year.

Expenditures in the 10 largest advertising categories increased 8% in Q1, totaling $19.2 billion. Automotive ad spending lead all sectors with $3.7 billion in spending, up 23% compared with Q1 2010. Telecom was the second largest category at $2.2 billion, despite Q1 2011 spending shrinking 2.1%.

Related Posts