US Ad Spending Down 0.5% in First Half of 2007, but Online Up 23.6%

September 24, 2007

US advertising spending in the first half of 2007 was down 0.5% over the year-earlier period, with internet ad spend – up 23.6% – outperforming other media, according to preliminary figures from Nielsen. Other categories with increases in ad spending during the first half of this year were as follows:

  • National Magazines (8.4%)
  • National Sunday Supplements (6.5%)
  • Outdoor (5.1%)
  • Spot TV Markets 101-210 (3.2%)

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“Even in this soft market outdoor ad spending continues to show strength. This traditional medium has embraced technology and is offering more and more digital and interactive advertising opportunities,” said Brian Lane, SVP of Client Strategy & Product Development for Nielsen Monitor-Plus.

“National magazine ad spending is also on an upswing with increased rate card ad revenue reported for the first half of 2007.”

Other data released by Nielsen follows.

Advertiser Spending

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  • Advertising spending across monitored media for the top 10 companies in the first half of 2007 reached $8.3 billion, down 7.3% from the same time period in 2006.
  • Seven out of the ten advertisers decreased budgets.
  • Sixth-ranked Verizon increased its budget 2.7%; and fourth-ranked Ford increased its 2.1%.
  • General Motors continues to show the largest decline, cutting advertising for some truck brands but increasing spending on Chevrolet Tahoe hybrid trucks and Saturn hybrid cars and trucks.

Category Spending

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  • Spending for the 10 largest categories reached $20.8 billion in the first half, 2% less than the year-earlier period.
  • Most product categories have decreased spending, with the exception of Pharmaceuticals, Wireless Telephone Services, and Direct Response Products.
  • The top category in terms of total dollars, Automotive, also had the greatest dollar and percentage decline (-$671 million; -10%).

Broadcast Network Product Placement

Nielsen Product Placement Service reports an increased number of product placement occurrences in prime-time broadcast network programming for the first half of 2007, based on its Top 10 Programs Broadcast Network ranking (ABC, NBC, CBS, FOX, CW & MyNetworkTV tracked).

  • The Top 10 programs featured 17,371 occurrences compared with 14,643 occurrences for the year-earlier period.
  • “American Idol” is once again the No. 1 show in terms of the number of product placements, a position it held last year. During the first half of 2007, American Idol featured 4,349 product placement occurrences vs. 4,086 occurrences for the first half of 2006.
  • “Fast Cars and Superstars,” which premiered in June of this year, zoomed into second place with 3,231 occurrences overall.

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The Top 10 featured brands on prime-time broadcast network television for first half of 2007 accounted for 6,848 occurrences, vs. 6,451 in the first half of 2006.

  • Coca-Cola, through its association with “American Idol,” was the top brand once again, with 3,054 occurrences in the first half of 2007.
  • The Pussycat Dolls Lounge Nightclubs placed second in terms of the brand with the most occurrences (750). The brand is directly linked to the show “The Pussycat Dolls Present,” airing on the CW, and places in the top 5 among programs with the most product placement occurrences.
  • The Nike apparel brand had 511 occurrences, with a majority of the occurrences on the “Amazing Race All Stars.”

Cable Network Product Placement

There was a slight decrease in the number of product placement occurrences in prime-time cable network programming for the first half of 2007, based on Nielsen Product Placement Service’s Top 10 Programs Cable Network ranking (A&E, HGTV, MTV, TLC & BRAVO tracked).

  • The Top 10 programs featured 92,925 occurrences for the first half of 2007 vs. 107,792 occurrences for the first half of 2006.
  • “American Chopper,” which premiered in Jan. 2007, is the No. 1 cable network show in terms of the number of product placements, with 29,476 occurrences.
  • “Dog the Bounty Hunter” placed second with 12,321 occurrences.
  • “Miami Ink” placed third with 10,892 occurrences.

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The Top 10 featured brands on prime-time cable network television for first half of 2007 accounted for 27,697 occurrences – a slight decrease compared with the year-earlier period, when 28,271 brands were reported.

  • Orange County Chopper apparel was the top brand with 6,118 occurrences for the first half of 2007, and the Orange County Chopper Motorcycles brand place third with 4,308 occurrences; both brands are featured on the “American Chopper” program.
  • The Oakley Sunglasses brand placed second with 5,205 occurrences; Oakley Sunglasses are worn on the “Dog the Bounty Hunter” program.

“Our Top 10 Program and Brand rankings for broadcast network programming are showing an increase primarily due to the new ABC show ‘Fast Cars and Superstars.’ This program is an example of the increased value placed on product integrations and the resulting relationships between brands and producers,” said Annie Touliatos, director, Product Development & Marketing for Nielsen Product Placement Service.

“Product placement is being viewed more strategically and more frequently woven into the storyline to achieve a maximum and lasting impact. The majority of cable network product placements are on reality-based series, and there are less storyline integrations; however, we consistently observe four to five times the number of occurrences on the networks tracked compared to broadcast network programming.”

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