BUSINESS SECTION

Advertising Market Grows 4.5% - US Hispanic Down.

September 12, 2005

Total advertising expenditures for the first half of 2005 increased 4.5 percent, compared to the same period in 2004, to $70.5 billion, according to data released today by TNS Media Intelligence (TNS MI). The 4.5 percent first half growth follows a first quarter increase of 4.4 percent, indicating that the advertising market is maintaining spending.

On the other hand, US Hispanic media expenditures have slowed down since the initial report this year by TNS that stated that US Hispanic advertising expenditures would grow by 10.5% for 2005 vs. 2004 and that they grew by 5.8% in 1stQ 2005 vs. 2004. TNS states that for the first half of 2005, US Hispanic advertising expenditures grew by 3.4%, a figure that potentially could put the market in low 2% growth rate for total 2005 and/or flat or below 2004.

“The first half ad expenditure numbers demonstrate sustained momentum from the first quarter of the year,” said Steven Fredericks, President and CEO of TNS Media Intelligence. “The 4.5 percent growth rate for the period is slightly higher than our forecast of 4.1 percent issued earlier this year. The advertising market continues to outperform the general economy but the third quarter will be a much more difficult comparison period because of last year’s stimulus from the Summer Olympics and national elections.”

Ad Spending by Media

Cable TV continued to be a strong sector, rising 15.3 percent to $7.9 billion, due to higher unit rates, increases in commercial time and larger audiences. Internet display advertising advanced 9.4 percent to $3.9 billion, again outpacing the total market. Other strong categories were Outdoor, with a 9.3 percent increase to $1.6 billion; and Consumer Magazines, with a 9.1 percent increase to $10.5 billion. By total dollar amount, Local Newspapers and Network TV led all media at $12.2 billion and $11.6 billion, respectively, during the first half.

National media (7.4 percent growth to $44.9 billion) outpaced local media (0.1 percent decline to $25.7 billion) during the period. Spot TV expenditures fell 6.1 percent due to declines in political advertising, non-domestic automotive and telecommunications.

Ad Spending by Category

All of the top 10 advertising categories, which represented 50.1 percent of all advertising expenditures, exhibited growth for the period with the exception of Non-Domestic Automotive, which posted a 0.6 percent decline. Domestic Automotive, with a 5.1 percent increase, continued as the largest category with $4.2 billion in expenditures. Direct Response posted the largest increase, up 19.9 percent to $2.9 billion.

Several notable categories decreased their ad spending during the period. Prescription drug advertising edged downward by 0.4 percent to $2.25 billion as pharmaceutical companies cut back on consumer marketing in the face of increased public and governmental scrutiny. Retail department stores registered a 3.2 percent decline to $1.87 billion and movie advertising tumbled 6.2% to $1.82 billion.

Ad Spending By Company

Among the leading advertiser companies, General Motors surpassed Procter & Gamble to claim the top spot during the period. The Top 10 advertisers collectively increased their ad spending by 5.5 percent and accounted for one of every eight dollars spent in measured advertising.
For more information at
http://www.tns-mi.com
Article at: http://www.hispanicad.com/cgi-bin/news/newsarticle.cgi?article_id=17502

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