US Advertising Grew 4.4% & Hispanic Up 5.8% In Q1 2005.

Total advertising expenditures for the first quarter of 2005 increased 4.4% to $33.5 billion compared to the same time period in 2004, according to data released today by TNS Media Intelligence (TNS MI), the leading provider of strategic advertising and marketing information. Though this is the smallest gain in advertising spend since the end of 2003, spending continues to increase at a faster rate than the GDP; just as it has in 10 of the last 11 quarters.

Local Magazines led all media categories in percentage growth, rising 26.2% to $104 million. Cable TV registered growth of 18.2% to $3.5 billion, taking market share from broadcast TV. Sunday Magazines grew 14.5% to $398 million (which is a reflection of organic growth and expansion in TNS MI measurement base) and Consumer Magazines increased by 9.5% to $4.7 billion. Internet advertising also continued to rise, posting an 8.2% increase over the previous year to $1.9 billion. By total dollar amount, Local newspapers and Network TV led all media at $5.9 billion and $5.8 billion, respectively.

“It is clear that advertisers were fiscally more cautious in the first quarter of 2005, given mixed economic indicators and wavering consumer confidence,” said Steven Fredericks, president and CEO of TNS Media Intelligence. “Traditional stalwart categories such as Automobile, Banking and Retail Department Stores performed below market average, but those decreases were offset by increased spending by Direct Response and Restaurants,” added Fredericks.

Local and national newspapers, which account for 20% of total ad spend, have recently been faced with circulation declines and advertiser consolidation in key categories. As a result, these media turned in below-average growth, pulling down the total average. Spending for B-to-B Magazines continued to show weakness, and Spot TV and Network Radio were the only two media categories to show declines compared with the same period in 2004.

Advertising spend in the top ten categories increased 4.9% to $14.3 billion in the first quarter compared to the same time period in 2004. By dollar amount, Domestic Auto led all categories at $2.1 billion, closely followed by Non-domestic Auto at $2.0 billion. Direct Response led all categories in growth, rising 19.3% to $1.5 billion, followed by Media and Marketing with 12.6% growth to $1.1 billion, and Restaurants with 11.9% growth to $1.1 billion. Spending by the top ten categories for the first quarter registered $14.3 billion, accounting for 42.6% of total ad spend.

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