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Internet advertising spend rises 18.9% in 2007

By Andrew Redfern @ 1st April 2008 2:55 pm

The Nielsen Company today reported that advertising spending for the full year 2007 rose 0.6% compared to full
year 2006, with Internet continuing to demonstrate the strongest performance (+18.9%) of any media category.

According to preliminary figures from Nielsen Monitor-Plus, the leading provider of competitive advertising information, advertising spending was mixed across media with gains in some categories and declines in others.

In addition to Internet advertising, other media categories that showed an increase in 2007 were National Magazines (7.6%), Outdoor (7.2%), National Sunday Supplements (4.9%), National Cable TV (2.2%), and Spanish-Language TV (1.5%).

“Several traditional media outlets are demonstrating resilience and strong growth in an overall softening economy, with Outdoor continuing a five-year steady climb in advertising spending,” said Annie Touliatos, Director, Product Development and Marketing, Nielsen Monitor-Plus.

Media Category                             2006 vs. 2007
Internet                                         18.9 %
National Magazines                                7.6 %
Outdoor                                           7.2 %
Nat’l Sunday Supplements                          4.9 %
National Cable TV                                 2.2 %
Spanish-Language TV                               1.5 %
Network TV                                       -1.5 %
Local Magazines                                  -1.7 %
Spot Radio                                       -2.0 %
Spot TV Markets 101-210                          -2.6 %
Network Radio                                    -3.9 %
B-to-B Magazines                                 -4.0 %
Local Sunday Supplements                         -4.9 %
Spot TV Markets 1-100                            -5.1 %
Local Newspaper                                  -7.5 %
Nat’l Newspaper                                  -7.7 %
Total Advertising Spending                        0.6 %

U.S. advertising growth was substantially lower than other regions of the globe, with Asia-Pacific reporting a 12.1% increase and EMEA (Europe, Middle East, and Africa) up nearly 5%. Specifically, Newspapers have shown a steady decline year-over-year in the U.S., while all other countries measured by The Nielsen Company reported growth for this media category.

Advertising spending across monitored media for the top 10 companies in 2007 reached $17.9 billion, down an average of 4% from 2006. Seven out of the ten advertisers decreased budgets. The three companies that increased their spending were Procter & Gamble, Verizon Communications (+6% each), and AT&T (+2%).

Procter & Gamble, the largest advertiser and also the advertiser with the largest increase in budget (+$205 million), boosted spending for many brands including Pantene Pro-V Hair Care Products, Gillette Fusion Razor- Electric Power, Cover Girl Volume Exact Mascara, and Olay Definity Moisturizing Facial Deep Penetrating Foaming.

In addition, many new brands were introduced; of these, Secret Clinical Strength Antiperspirant/Deodorant Advanced Solid had the largest advertising budget.

In contrast, General Motors showed the largest advertising spending decline in terms of dollars (-$267 million). In 2007, GM cut back on advertising for Chevrolet Tahoe Trucks, GMC Yukon Trucks, Buick Lucerne Autos, and Hummer H3 Trucks, among others.

Spending for the 10 largest product categories reached $44.6 billion in 2007, 3% less than in 2006. In all, six categories showed decreased spending in 2007. The top category in terms of total dollars, Automotive, also had the greatest dollar and percent decline (-$1.48 billion; -11%).

Financial/Investment Services had the fastest percentage growth (+14%), while Wireless Telephone Services had the greatest dollar increase (+$422 million). Within the Financial Services category, FMR Corp. was the top spender ($220.7 million), followed by Scottrade Inc. and Wachovia Corp., each with a budget of $119 million.

In the Wireless Product category, Verizon Communications Inc. and AT&T Inc. were the top two advertisers in
terms of total spending for 2007, each with a budget of $1.2 billion.

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