U.S. Advertising Spending Rose 4.6% in 2006, Nielsen Monitor-Plus Reports

When it comes to advertising, what media channel has experienced the most significant growth in terms of spend (from 2005 to 2006)?  The internet.  And what product category experienced the most significant growth?  That's right.  Pharmaceuticals.  Good place to be right now. 

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U.S. Advertising Spending Rose 4.6% in 2006, Nielsen Monitor-Plus Reports

PR Newswire via NewsEdge Corporation :

NEW YORK, March 19 /PRNewswire/ -- Advertising spending for the full year 2006 rose 4.6% over the same period last year due to gains across major media, according to preliminary figures released today by Nielsen Monitor-Plus, the advertising intelligence service of The Nielsen Company.

Advertising spending increased in most reported media, led by Internet (35%), the top 100 Spot TV markets (9.1%), Spanish-Language TV (8.1%) and Outdoor (8.1%). 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. "Total U.S. ad spending continues to grow, with the Internet, Spanish-Language and Outdoor leading the way," said Brian Lane, Senior Vice President of Client Strategy & Product Development Management for Nielsen Monitor-Plus. "Outdoor advertising, considered a traditional media is showing renewed strength due in part to advances in digital technology, such as digital billboards."

                       2005 vs. 2006 Advertising Growth                                                    % Change      Internet*                                        35.0%     Spot TV Top 100 mkts                              9.1%     Span Lang National TV                             8.1%     Outdoor                                           8.1%     National Sunday Supplement                        5.6%     Local Sunday Supplement                           4.6%     Network TV                                        4.2%     National Magazines                                3.9%     Local Magazine                                    3.3%     National Newspaper                                2.9%     National Cable TV                                 1.8%     Spot Radio                                        0.7%     B2B Magazines                                    -0.2%     Coupon                                           -0.6%     Spot TV Mkts 101-210                             -0.9%     Network Radio                                    -2.4%     Local Newspaper                                  -3.6%     Total                                             4.6% 

Source: Nielsen Monitor-Plus. *Internet data provided by Nielsen//NetRatings AdRelevance

Notes:

- Nielsen//NetRatings AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, compound ads, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Above data does not include any house advertising activity.

- Syndicated TV was omitted due to changes in tracking; Newspaper reflects display ads only; Coupon reflects CPG products only.

Advertiser Spending

Advertising spending for the top 10 companies of 2006 reached $17.9 billion, remaining essentially flat from 2005, with just 1% growth. Six of the 10 advertisers experienced growth. AT&T and Verizon, both Telephone Services companies, showed the greatest percent growth in terms of percent, at 44.4% and 16.2%, 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% and DaimlerChrysler decreased its ad spending by 6.1%, while 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.

     Top 10 Advertisers                                   % Change                                                        2005 vs. 2006     Procter & Gamble Co.                                    1.1     General Motors Corp.                                  -16.0     AT&T Inc.                                              44.4     Ford Motor Co.                                         10.2     DaimlerChrysler AG                                     -6.1     Time Warner Inc.                                       -6.0     Johnson & Johnson                                     -20.4     Verizon Communications Inc.                            16.2     Toyota Motor Corp.                                     14.2     Walt Disney Co.                                         4.6     Total Top 10                                            0.5      Source: Nielsen Monitor-Plus

Based on spending estimates in the following media: Network TV, Cable TV, Spot TV, Syndicated TV, Hispanic TV, Nat'l/Local Magazine, Network/Spot Radio, Outdoor, Coupons (CPGs only), Nat'l/Local Newspapers (display ads only), Nat'l/Local Sunday Supplements

Category Spending

Spending for the 10 largest categories reached $45 billion in 2006, 3% greater than the same period last year. Most product categories have increased spending, with the exception of Credit Card Services (-6.9%), Auto Dealerships (-3.5%), and Automotive, comprised of Factory & Dealer Associations (-1.5%). The Pharmaceutical industry was the fastest growing in terms of percent increase over last year (14.9%) and in terms of actual dollar increase ($719 million). Pfizer increased spending 32% ($158 million), while Merck and Sepracor each increased their budgets 40%, $118 million and $95 million, respectively.

     Top 10 Product Categories      % Diff 2005 vs. 2006   $ Diff 2005 vs. 2006     Automotive/Auto Dealer Assoc           -1.4               -$197,411,660     Pharmaceutical                         14.9                $718,930,994     Automotive - Dealership (Local)        -3.5               -$176,694,537     Department Stores                       4.1                $165,886,796     Quick Service Restaurants               5.2                $203,393,575     Motion Picture                          3.1                $116,132,628     Telephone Svcs.-Wireless               10.5                $316,261,114     Direct Response Products               10.0                $202,987,740     Credit Card Services                   -6.9               -$136,567,161     Furniture Stores                        6.8                $106,504,676     Total Top 10 Categories                 3.0              $1,319,424,165      Source: Nielsen Monitor-Plus

Based on spending estimates in the following media: Network TV, Cable TV, Spot TV, Syndicated TV, Hispanic TV, Nat'l/Local Magazine, Network/Spot Radio, Outdoor, Coupons (CPGs only), Nat'l/Local Newspapers (display ads only), Nat'l/Local Sunday Supplements

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%. In 2006 there were 4,912 audio/visual combination occurrences compared to 4,456 in 2005.

Top Programs & Brands

The Top 10 programs that featured product placements for 2006 accounted for 23,344 occurrences. General dramas (22,825 occurrences) replaced situation comedies (19,161 occurrences) as the number one program 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% increase. Coca-Cola was the top brand, with 3,355 occurrences, a 19% 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," said Annie Touliatos, Director of Marketing and Strategy for Nielsen Product Placement Service. "However, placements that feature a combination of audio and visuals are rising indicating an increase in planned placements."

                        Top 10 Brands: Product Placement                                      2006      Brand                              Total # Occurrences     Coca-Cola Soft Drinks                   3,355     Chef Revival Apparel                    1,592     Nike Apparel                            1,307     24 Hour Fitness CTRS-CLUBS                894     Chicago Bears FTBL TM                     604     Dell Computers SYS                        556     Cingular Wireless TEL SRVCS               533     Nike SPRT FTWR                            497     Starter Apparel                           496     SLS Electronic Equip Speakers             489     Total                                  10,323      Source:  Place*Views, Nielsen Product Placement Service                          Top 10 Programs: Product Placement                                      2006      Program                        Network             Total # Occurrences     American Idol                    FOX                    4,086     Amazing Race                     CBS                    2,790     Extreme Makeover Home Edition    ABC                    2,787     The Biggest Loser                NBC                    2,478     America's Next Top Model         UPN/CW                 2,309     King of Queens                   CBS                    1,954     Hells Kitchen                    FOX                    1,909     The Apprentice                   NBC                    1,831     Rock Star Supernova              CBS                    1,609     Big Brother 7                    CBS                    1,591     Total                                                  23,344      Source: Place*Views, Nielsen Product Placement Service      Negative Political Advertising

For the 2006 mid-term elections, a total of 2,629,685 local television spots ran representing 93% of all political ad expenditures, and that was up by 24% from 2002 mid-term elections. 41% of all political spots in 2006 were classified as negative. Leading the way in negative ads among the top advertisers was the Republican National Committee and the Democratic National Committee with 89% and 85% of their ads being labeled as negative. Following is a snapshot of negative advertising for the mid-term elections of 2006.

    Negative Political Advertising Mid-Term Elections      Candidate                Number of Spots          % Negative Spots     Texas Governor     Rick Perry                    24,700                    19%     Chris Bell                     5,086                    61%     Tennessee Senate     Bob Corker                    35,336                    40%     Harold Ford JR                15,384                    30%     New York Governor     Eliot Spitzer                 30,780                     0%     John Faso                      3,339                     0%     Michigan Governor     Jennifer Granholm             23,003                    31%     Dick Devos                    46,962                    45%     Illinois Governor     Rod Blagojevich               34,665                    66%     Judy Topinka                   9,923                    67%     Florida Governor     Charlie Crist                 40,278                    45%     Jim Davis                     14,011                    70%      Source: Nielsen Monitor-Plus      About The Nielsen Company

The Nielsen Company is a global information and media company with leading market positions and recognized brands in marketing information, media information, business publications, trade shows and the newspaper sector. The privately held company has more than 42,000 employees and is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com.

SOURCE The Nielsen Company

CONTACT: Laura Czaja, of Nielsen Monitor-Plus, +1-646-654-8681, or Suzy Bausch, of Nielsen\\NetRatings, +1-408-941-2965, both for The Nielsen Company

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