U.S. Advertising expenditures increased 3% in 2005.

Total advertising expenditures in 2005 increased 3.0 percent to $143.3 billion compared to 2004, according to data released today by TNS Media Intelligence, the leading provider of strategic advertising and marketing information. Total advertising spending during the fourth quarter of 2005 also advanced 3.0 percent against the same period in 2004.

“The rate of growth in advertising expenditures weakened slightly in the fourth quarter, as consumers and businesses turned a bit more cautious,” said Jon Swallen, senior vice president, Research of TNS Media Intelligence. “Large blue chip advertisers, as a group, have recently cut back their ad budgets. The growth is currently coming from outside the Top 100 marketers.”

Ad Spending by Media

The majority of 19 media measured by TNS MI experienced growth during 2005. Internet display advertising registered the largest gain, up 13.3 percent to $8.3 billion on the strength of accelerated spending from dot-com brands. For the year, these online brands accounted for 49.7 percent of total internet expenditures, the highest level since the dot-com bust.

In addition, Cable TV advanced sharply, up 11.4 percent to $15.9 billion as it continued to take share from other national media. Other notably strong performers were Outdoor, up 9.8 percent to $3.5 billion, and Consumer Magazines, up 7.5 percent to $21.7 billion on the strength of higher rate card pricing.

Local Newspaper led with most total dollars spent at $25.1 billion, up 1.1 percent compared to 2004. Network TV was the second leading category with $22.5 billion, a decline of 0.3 percent versus the Summer Olympic year of 2004. In the fourth quarter, a period unaffected by Olympic comparisons, Network TV achieved modest growth of 4.0 percent.

Ad Spending by Advertiser

The top 10 advertisers of 2005 spent $18.6 billion, a drop of 3.3 percent compared to 2004. Spending by these elite companies softened noticeably in the fourth quarter, with eight of the ten registering declines.

Procter & Gamble, with Gillette now counting towards the parent company total, regained the top spot with $3.2 billion in spending, down 4.6 percent on a like-for-like basis against 2004. General Motors holds the second position with $3.0 billion in spending, up 7.1 percent. Verizon Communications had the largest growth rate among the top ten, up 8.5 percent.

The largest decrease among the top 10 advertisers was AT&T, with a 26.4 percent drop to $1.6 billion on cutbacks in its wireless divisions associated with the SBC Communications merger. Daimler Chrysler reduced its 2005 advertising outlays by 12.8 percent to $1.6 billion. The drop was spread across all its major nameplates.

While automotive continued as the dominant ad spending category in 2005, the segment turned in its first full year decline since 2001. Non-Domestic Auto, with over $8.7 billion in expenditures, was down 1.9 percent compared to 2004. Domestic Auto spending weakened sharply in the last quarter and posted a full year decrease of 3.7 percent to $8.5 billion.

Direct Response was the category with the strongest growth, up 15.1 percent to $6.1 billion and has now recorded eight consecutive quarters of double digit gains. Additional categories with strong growth included Financial Services, up 8.1 percent to $8.3 billion, and Restaurants, up 5.7 percent to $4.9 billion.

For more information at http://www.tns-global.com