U.S. Advertising Spending Rose 2.8% in First Half 2003.

Advertising spending for the first half of 2003 rose 2.8% over the same time period last year, according to preliminary figures released by Nielsen Monitor-Plus.

Advertising spending increased in six of the 11 reported media, with growth rates ranging from 2% to over 19%. Hispanic TV experienced the greatest gain, at 19%, while National Magazines grew almost 14% and Local Newspaper rose nearly 10%. FSI Coupons (consumer packaged goods only) grew 7%, Spot TV increased 4%, and Spot Radio 2%.

Advertising spending declined in five of the reported media, with Syndicated TV, Network TV, National Newspaper, and Cable TV each falling approximately 4%, compared to the same period last year. Network Radio fell slightly at 1.4%.

The pace of ad spending for the first half of 2003 appears to be strengthening. First- quarter spending, negatively impacted by continued economic weakness and the war in Iraq, grew at a rate of 1.8% while second-quarter rose 3.6%, resulting in an overall first-half gain of 2.8%. “If second-quarter increases are truly reflective of the state of the ad economy, and spending continues to climb, the year can possibly finish with advertising expenditure growth between 3%-4%,” said Jeff King, managing director of Nielsen Monitor-Plus.

Based on spending in the following media: Network TV, Spot TV, Synd TV, Hispanic TV, Nat’l/Local Magazine, Network/Spot Radio (19 mkts.), Outdoor, FSI (CPGs only), Nat’l/Local Newspapers (display ads only), Nat’l/Local Sunday Supplements

Year-to-date (January-May) advertising spending for the top 10 parent companies reached more than $6 billion through May 2003, up almost 7% from last year. Seven of the top 10 advertisers experienced growth, with P&G (+30.6%), Walt Disney (+27.1%) and Johnson & Johnson (+18.2%) showing the greatest increases in advertising expenditures. P&G significantly increased budgets for their Folgers Coffee, Iams Dog/Cat Food, Bounty Paper Towels, Crest White Strips, Pampers Easy-Ups, and Tampax brands. Disney’s growth was largely due to increased spending on motion pictures, including “Finding Nemo” ($31 million in advertising spending), “Bringing Down the House” ($25 million), and “Recruit” ($22 million). Johnson & Johnson’s increases are due to prescription drugs such as Remicade, Concerta, and Ortho Evra, and feminine hygiene brands including O.B. and Stayfree Silhouette.

Spending for the 10 largest categories topped $15 billion for the first five months of 2003, 9% greater than the same period last year. The Automotive category continues to show the most growth, as it did in the first quarter. Although Factory advertising declined slightly (1.2%, $43 million), this decrease was more
than offset by increases in Dealer Association and Local Dealership spending (a combined increase of $829.7 million), for a net increase of $78.6 million for the Automotive category.

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