Kantar-Ad-Spend-Trends-by-Medium-in-2014-Mar2015After growing by 0.9% in 2013, US advertising expenditures maintained a similar rate of growth of 0.7% in 2014 to reach $141.2 billion, according to the latest figures from Kantar Media. That registers as the 5th consecutive year of gains (which are not adjusted for inflation), though the figure represented a fairly slow rate for a year which featured the World Cup as well as political and Olympic (P&O) spending.

Measured Ad Spend, by Medium

Several of the media advertising trends outlined in the report were a departure from last year’s results: display spending growth was mostly flat after growing by double-digits, while magazine, outdoor and FSI spending all swung negative after varying degrees of growth a year earlier.

The following is a brief round-up of spending trends by medium.

  • TV

Overall, TV media spend sported the fastest rate of growth last year (+5.5%), buoyed by biennial spending on politics and Olympics as well as more spending on sports. (For more on the impact of P&O on TV ad spend, see the MarketingCharts report, TV in Context: Viewing Trends, Ad Spending, and Purchase Influence.)

Spending on cable networks saw a healthy gain of 6.8%, partly due to increased ad loads of 1.7%, but also due to spending growth from the motion picture, pharmaceutical, restaurant and telecom industries.

Network TV grew by a more modest 2.5% for the year, with Kantar attributing about 80% of that growth to the Winter Olympics. Spot TV spending continued to show a politically-driven cyclical bent, with expenditures increasing by 5.5% after a decrease of 8.1% in 2013.

Ad spending on Spanish Language TV showed the fastest rate of growth among TV media. Its 14.7% gain was substantially higher than last year, and owed to the mid-year World Cup event. Finally, syndicated TV expenditures rose by 0.6%, fairly steady from 2013’s 0.5% growth rate.

  • Radio

Unlike the Radio Advertising Bureau, which found radio ad spending to be down by 1% last year, Kantar indicates that spending on this medium fell by 3.9%, still a slightly better result than 2013’s drop of 5.6%. (The RAB report includes digital radio spending, which saw double-digit growth.)

The Kantar Media data shows that all forms of radio media experienced declines, with shrinking spending from restaurants contributing to the drop in local radio (-5.1%) and spot radio (-1.2%) spend. Hispanic local radio (-5.7%) suffered the largest relative decrease in spend; network radio was down 3.7%.

  • Print

Print media spending suffered last year, with magazines reversing their 2013 fortunes (-5.1% after growing 1.8%) and newspapers losses accelerating (down 10% after declining 3.7% in 2013).

According to the Kantar Media report, spending on Sunday magazines (-15.2%) plummeted due to fewer published issues and fewer advertisers, as well as cutbacks from existing advertisers. B2B magazines (-2.1%) and Spanish-language magazines (-12.7%) saw varying degrees of declines, with local magazines (+1.6%) the only form to see growth.

After growing by 2.6% in 2013, consumer magazine ad expenditures – as calculated by rate card prices – fell by 5.1%, owing to spending cuts from automotive, CPG, financial service and travel advertisers.

Meanwhile, local newspaper spending dropped by 11.6% and expenditures on Spanish-language newspaper advertising fell by 4.6%. National newspaper ad spend was fairly stable, down by just 0.3%. National newspapers tend to draw an upscale audience, according to a MarketingCharts report on media audience demographics: more than 4 in 10 readers come from households with incomes of at least $100k.

Kantar Media notes that the twenty largest newspaper advertisers collectively “slashed” their newspaper ad spending by more than 20%. (All figures relate to print spending only.)

  • Display, Outdoor, FSIs

As with radio and print, the news for display, outdoor, and free-standing inserts wasn’t particularly good. Display spending was mostly flat (+0.9%) after growing by 15.7% last year, perhaps due to migrating spending to video and mobile ads, which aren’t covered in these figures.

Outdoor advertising spending was flat (-0.2%) after growing by 4.4% in 2013, with digital signage spending increases propping up that overall result. Inded, Kantar notes that digital outdoor spend has grown at a rate 6 times higher than the medium as a whole during the past 4 years.

Finally, spending on free-standing inserts decreased by 2.8% after growing by 3.3% in 2013. More data on 2014 CPG coupon trends can be found here.

Top Advertising Industries

The retail industry was again the largest spender, though its expenditures decreased by -2.1% to slightly less than $15.8 billion.

Behind retail, auto took the second spot with $14.2 billion in ad spend, down by 6.8% year-over-year. Auto was followed by local services, which overtook telecom on the back of a 4.7% increase in spending, to almost $9.6 billion. Financial Services rounded out the top 5 again.

Of the top 10 advertising verticals, insurance (+7.8%) showed the fastest growth rate, one of only 3 – along with local services and restaurants (+0.1%) – to register an increase in spend.

Spending Trends by Advertiser Size

Interestingly, unlike 2013, in which spending was “carried” by the largest advertisers, this year Kantar points to continued strength in spending by the mid-size segment (ranks of 101-1000), which outpaced the aggregate of the largest and smallest advertisers in growth rate. The mid-size cohort, which comprises 34% share of ad spend, increased its outlays by 4.6%, versus a 1% decline for the combination of other advertisers. That represents the fourth consecutive year in which the mid-size segment has outperformed the market as a whole in spending growth.

Measured ad spending (which tracks only display ad spending for online advertising) among the top 10 advertisers was down by 4.2% to roughly $15.3 billion, while spending among the 100 largest advertisers was down by 2.4%.

Procter & Gamble remained the largest advertiser, but reined in spending to the tune of 14.4% after increasing it by 11.8% a year earlier. GM (-8.2%) and AT&T (-12.7%) also pulled back after double-digit increases in 2013, remaining in the second and third positions, respectively. Berkshire Hathaway increased its spending by 13.6% – mainly to back its GEICO brand – overtaking L’Oreal in the process to crack the top 5.

For the second consecutive year, Pfizer was the top-10 advertiser that increased its spending by the largest rate, of 23%, jumping two spots to become the country’s 7th largest advertiser. Kantar notes that Pfizer has now increased spending for seven consecutive quarters in support of its top-selling Rx brands.

NCAA Tournament Ad Spending

In other ad-spending news, Kantar Media recently detailed the increases in spending on NCAA Men’s Division Basketball Championship advertising over the last decade, growing from $479 million in 2005 to more than $1.1 billion last year (not adjusted for inflation). Last year, ad spending on the tournament was up by 1.5%, though fell behind the NFL Football playoffs after two years atop the post-season sports franchises.

In its study, Kantar reveals that:

  • The average price of a 30-second spot last year during the tournament was $1,493, up from $1,030 in 2005;
  • While the tournament generally features 85-90 advertisers, the top 10 (led last year by GM) typically accounts for about one-third of spending;
  • The automotive category was the highest-spending last year, representing 19.1% of total tournament ad expenditures; and
  • On-screen sponsor exposure was estimated to be worth $112.8 million for its recipients last year, with Capital One ($29 million) gaining the highest media value.

About the Data: Kantar’s full explanation of its methodology can be found at the link above.

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