US ad market grows 4% in first quarter

MUMBAI: Total advertising expenditures for the first quarter of 2005 in the US have increased by 4.4 per cent to $33.5 billion compared to the same time period in 2004.

Though this is the smallest gain in advertising spend since the end of 2003, spending continues to increase at a faster rate than the GDP of the American economy just as it has in 10 of the last 11 quarters.



This data is contained in a report which was released by TNS Media Intelligence a provider of strategic advertising and marketing information. Local Magazines led all media categories in percentage growth, rising 26.2 per cent to $104 million. Cable TV registered growth of 18.2 per cent to $3.5 billion, taking market share from broadcast TV.

Sunday Magazines grew by 14.5 per cent to $398 million which is a reflection of organic growth and expansion in TNS MI measurement base and Consumer Magazines increased by 9.5 per cent to $4.7 billion. Internet advertising also continued to rise, posting an 8.2 per cent increase over the previous year to $1.9 billion. By total dollar amount, Local newspapers and Network TV led all media at $5.9 billion and $5.8 billion, respectively.



TNS Media Intelligence president and CEO Steven Fredericks said, “It is clear that advertisers were fiscally more cautious in the first quarter of 2005, given mixed economic indicators and wavering consumer confidence. Traditional stalwart categories such as automobile, banking and retail department stores performed below the market average. However those decreases were offset by increased spending by direct response and restaurants”.

Local and national newspapers, which account for 20 per cent of total ad spend, have recently been faced with circulation declines and advertiser consolidation in key categories. As a result, these media turned in below-average growth, pulling down the total average. Spending for B-to-B Magazines continued to show weakness, and Spot TV and Network Radio were the only two media categories to show declines compared with the same period in 2004.

Advertising spend in the top ten categories increased by 4.9 per cent to $14.3 billion in the first quarter compared to the same time period in 2004. Domestic auto led all categories at $2.1 billion, closely followed by Non-domestic Auto at $2.0 billion. Direct Response led all categories in growth, rising 19.3 per cent to $1.5 billion, followed by media and marketing with a 12.6 per cent growth to $1.1 billion, and restaurants with 11.9 per cent growth to $1.1 billion. Spending by the top ten categories for the first quarter registered $14.3 billion, accounting for 42.6 per cent of total ad spend.

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