TNS: Online Ad Spend Increased 8% in Q1

Written by Steve Donohue

Wednesday, June 10. 2009 at 11:30 AM EDT Post a comment

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While most advertising sectors were pummeled during the first quarter, spending on Internet display ads jumped 8.2 percent compared to this time last year, according to a report released today by TNS Media Intelligence.

Internet display advertising was one of only two advertising sectors to post year-over-year gains in spending. The other category showing a gain -- nationally syndicated TV shows ranging from Seinfeld to The Oprah Winfrey Show -- posted a mere 0.2 percent increase in spending.

The TNS numbers conflict somewhat with a report that the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers International released last week. The IAB-PwC study showed a 5 percent year-over-year decrease in online advertising spending in the first quarter, and a 10 drop in online ad spending compared to the fourth quarter of 2008.

According to TNS, total U.S. ad expenditures dropped to $30.18 billion during the first quarter, down 14.2 percent compared to the same period last year. Among the sectors hardest hit were spending on national newspapers (down 25.5 percent); radio (down 26.2 percent); and magazines (down 20.5 percent).

Although TV ad spending also took a hit, it fared much better than print advertising. Spending on network TV fell 4.2 percent during the first quarter, while cable TV spending dipped 2.7 percent and spending on Spanish-language TV networks dropped 15.4 percent.

While Procter & Gamble was the biggest spender on advertising during the first quarter, shelling out $674.1 million on media, the consumer goods giant trimmed its ad budget by 17.8 percent compared to the first quarter of 2008, according to the TNS report.

Verizon was the second-largest advertiser, spending $577.1 million during the first quarter. It was followed by AT&T ($459.4 million); General Motors Corp. ($424.2 million); Johnson & Johnson ($397.2 million); News Corp. ($341.2 million); Sprint Nextel Corp. ($317.7 million); Walt Disney Co. ($303.7 million); Time Warner Inc. ($263.4 million); and General Electric Co. ($261.4 million).

Telecom companies and restaurants were the only two advertising categories to post spending increases during the first quarter, with telecom expenditures rising 3 percent and restaurant spending gaining 2.5 percent, TNS said.

It's no surprise that automotive spending took the largest hit during the quarter, with auto manufacturers spending $2.3 billion on ads, down 28.4 percent compared to the first quarter. Local auto dealers slashed their budgets even further, spending $643.9 million on advertising, down 48.9 percent compared to this time last year.