US ad spend up 4.6 per cent in 2006

MUMBAI: Ad spending for 2006 in the US rose 4.6 per cent over the same period last year due to gains across major media.

Nielsen Monitor-Plus, the ad intelligence service of Nielsen has released preliminary figures.

Ad spending increased in most reported media. This was led by Internet (35 per cent), the top 100 Spot TV markets (9.1 per cent), Spanish-Language TV (8.1 per cent) and Outdoor (8.1 per cent).

Growth in a number of media remained flat or slightly down over last including B2B magazines, Coupons, smaller Spot TV markets, Network Radio, and Local Newspaper.

Nielsen Monitor-Plus senior VP client strategy and product development management Brian Lane says, “Total US ad spending continues to grow, with the Internet, Spanish-Language and Outdoor leading the way..Outdoor advertising, considered a traditional media is showing renewed strength due in part to advances in digital technology, such as digital billboards.”

Ad spending for the top 10 companies of 2006 reached $17.9 billion, remaining essentially flat from 2005, with just one per cent growth. Six of the 10 advertisers experienced growth. AT&T and Verizon, both telephone services companies, showed the greatest per cent growth at 44.4 per cent and 16.2 per cent respectively. A portion of this increase is due to merger and acquisition activity, and both companies greatly increased their spending in their Internet Service/Web Access business units.

Offsetting these increases, two of the three automotive advertisers reduced ad spending. Specifically, GM spending was down 16 per cent and DaimlerChrysler decreased its ad spending by 6.1 per cent. Both Ford and Toyota continue to increase spending, and in particular on brands like Toyota Camry and Rav4, Ford Fusion and Mercury Milan.

Johnson & Johnson cut back overall spending on a number of brands including Orthoevra and Ditropan.

Spending for the 10 largest categories reached $45 billion in 2006, three per cent more than the same period last year. Most product categories have increased spending, with the exception of Credit Card Services (-6.9 per cent), Auto Dealerships (-3.5 per cent), and Automotive, comprised of Factory and Dealer Associations (-1.5 per cent).

The Pharmaceutical industry was the fastest growing in terms of per cent increase over last year (14.9 per cent) and in terms of actual dollar increase ($719 million). Pfizer increased spending 32% ($158 million), while Merck and Sepracor each increased their budgets 40 per cent, $118 million and $95 million, respectively.

Product Placement: Nielsen’s product placement service shows a decrease in the overall number of placements for primetime network programming with a total of 79,701 occurrences for 2006 compared to 102,793 occurrences for 2005. While the total number of occurrences is down, placements that combine an audio and visual mention have increased by 10 per cent. In 2006 there were 4,912 audio/visual combination occurrences compared to 4,456 in 2005.

The Top 10 shows that featured product placements for 2006 accounted for 23,344 occurrences. General dramas (22,825 occurrences) replaced sitcoms (19,161 occurrences) as the number one programme type to feature brand integrations, due to the airing of more episodes for this type of program in 2006.

American Idol featured 4,086 product placements, with more occurrences than any other program, a 17% increase over 2005. The Biggest Loser, not on the top ten list last year, ranked 4th with (2,478) occurrences. The Top 10 brands totaled 10,323 occurrences in 2006, a 13 per cent increase. Coca-Cola was the top brand, with 3,355 occurrences, a 19 per cent increase over 2005. Chef Revival Apparel placed second with 1,592 occurrences.

The total number of occurrences for product placements decreased in 2006, and can be largely attributed to shifts in programming such as the airing of more dramas, which tend to carry less product placements than other program genres. However, placements that feature a combination of audio and visuals are rising indicating an increase in planned placements.

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