Large Advertisers Boost Q1 Spending

May 26, 2010

The largest advertisers boosted spending significantly in the first quarter of 2010, according to new data from Kantar Media.

P&G Remains Biggest Spender
The top three advertisers increased spending significantly: Procter & Gamble spending jumped 17.7%, AT&T boosted spending 26.7%, and General Motors increased spending 28.5%, according to Kantar.

Procter & Gamble maintained its position as the largest advertiser, spending $772.6 million; budgets continued to shift toward magazines and away from television.

AT&T rose to the second spot with spending of $576.4 million, behind a large TV ad buy in the Winter Olympics. Rival Verizon (fourth-largest advertiser) reduced its total expenditures by 9.1%, to $517.2 million. Both telecom companies continued to allocate more resources to promote their TV service products as they try to win subscribers from cable and satellite operators. General Motors was the third largest advertiser, spending $533.7 million.

Pfizer, the fifth largest advertiser, posted the highest growth rate with expenditures up 46.2% to $396.4 million as the company maintained aggressive marketing support for Lipitor (prior to the brand going off patent in 2011).

Other Top Advertisers
6. News Corp spent $366.8 million (up 7.8%)
7. Johnson & Johnson spent $344.1 million (down 11.8%)
8. Time Warner spent $304.3 million (up 14.7%)
9. Disney spent $267.6 million (down 11.8%)
10. General Electric spent $264.6 million (up 1.3%)

Top Categories Increase Overall Expenditures
Of the top 10 spending categories in the first quarter, only one – direct response – fell, down by 3.2%. Overall, expenditures for the ten largest advertising categories rose 7.8% in the first quarter and totaled $17.95 billion.

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Automotive was the leading category by dollar volume and also had the highest growth rate among the top 10, with spending up 18.6% to $3,016.8 million, ending a streak of 18 consecutive quarterly declines. Manufacturers and dealerships reacted quickly to an improving sales environment by ramping up marketing efforts with TV, magazines and radio being the main beneficiaries.

Telecom was the second largest category as expenditures reached $2,276.5 million, an increase of 10.6%. Financial services also experienced a revival, up 10.1% to $2,028.7 million. Sharply higher spending from marketers of credit cards and loan products offset continued weakness within the consumer banking segment.

Packaged goods categories, where advertisers took advantage of soft ad pricing in 2009 to bolster their media weight, were undaunted by rising ad prices in the first quarter of 2010. Spending from Food & Candy was up 7.3% to $1,600.0 million and expenditures for Personal Care Products increased by 5.5% to $1,311.5 million.

Restaurant category spending also turned around with modest growth of 3.1%, to $1.454.5 million. A major contributor to the gain was McDonald’s television sponsorship of the Winter Olympics.

Kantar reported that overall, ad spending climbed 5.1% in the first quarter.

2009 Ad Spending Falls 12.3%
Total advertising expenditures fell 12.3% in 2009, to $125.3 billion, as compared to 2008, according to earlier research by Kantar Media. Fourth quarter 2009 ad spending was off 6% compared to Q4 2008, with nearly all types of media improving upon their January-September performance.

Internet display advertising expenditures increased 7.3% for the year, aided by sharply higher spending from the telecom, factory auto and travel categories. The only other media type achieving full-year growth was Free Standing Inserts (FSIs), up 3% as CPG marketers targeted value-conscious shoppers with couponing programs.

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