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TNS Media Intelligence Forecasts 2.6 Percent Increase in U.S. Advertising Spending for 2007

Posted on: Monday, 8 January 2007, 09:00 CST

Total U.S. advertising spending is expected to increase 2.6 percent in 2007 to $153.7 billion, according to the full-year forecast released today by TNS Media Intelligence, the leading provider of strategic advertising and marketing information. This anticipated tepid gain is the smallest since the media economy emerged from its 2001 recession and follows estimated advertising spending growth of 3.8 percent in 2006.

Advertising expenditures are forecast to increase by just 2.1 percent in the first half of 2007 followed by a gain of 3.2 percent in the second half, paralleling an expected late year uptick in overall economic activity.

"Our outlook for 2007 is tempered by the absence of two biennial advertising events, the Olympics and federal elections, which tend to contribute an incremental 80-100 basis points to growth rates," said Steven Fredericks, President and Chief Executive Officer, TNS Media Intelligence. "More significant, we expect share of total ad spending will continue to shift away from the Top 100 marketers, as media fragmentation enables more brands with smaller media budgets to participate in the market, while concurrently helping dampen media price inflation."

2007 TOTAL AD EXPENDITURES1

GROWTH ESTIMATES

PERIOD

% CHANGE vs. 2006

First Half 2007

2.1%

Second Half 2007

3.2%

FULL YEAR 2007

2.6%

Source: TNS Media Intelligence

1 Defined as all TNS MI measured media, including: Network TV; Spot TV; Cable TV; Syndication TV; Hispanic Network TV; Consumer Magazines; Sunday Magazines; Local Magazines; Hispanic Magazines; Business-to-Business Magazines; Local Newspapers; National Newspapers; Hispanic Newspapers; Network Radio; Spot Radio; Local Radio; Internet; and Outdoor.

"Based on our forecast, 2007 is poised to be the third consecutive year in which the advertising sector more closely tracks growth in real GDP as opposed to its historical reference mark of nominal GDP," added Fredericks. "The forces driving this new pattern appear to be sustaining and there is little reason to believe a return to the old order will be forthcoming."

ANNUAL GROWTH RATES

AD SPEND

REAL GDP

2000 

+13.3%

+3.7%

2001 

(-9.8%)

+0.8%

2002 

+4.2%

+1.6%

2003 

+6.1%

+2.5%

2004 

+9.8%

+3.9%

2005 

+3.0%

+3.2%

2006 

+3.8% (e)

+3.0% (e)

2007 

+2.6% (e)

+2.2% (e)

Sources: TNS Media Intelligence; Bureau of Economic Analysis; UBS Warburg

Internet display advertising is expected to continue growing at double-digit rates in 2007 with Syndication TV, Outdoor and Magazines also exceeding the overall market average. Network TV is projected to be almost flat versus 2006, while newspapers and Spot TV are expected to experience outright declines in ad revenue.

2007 PROJECTIONS BY MEDIUM

(Ranked by Growth Rate)

% SHARE OF AD SPEND

% CHANGE vs. 2006

2007

(forecast)

2006 (estimate)

Internet1

13.4%

7.2%

6.5%

Syndication TV

6.6%

2.9%

2.8%

Outdoor

5.7%

2.6%

2.5%

Consumer & Sunday Magazines

5.5%

17.9%

17.5%

Spanish Language Media

5.4%

3.3%

3.2%

Cable Network TV

4.7%

11.9%

11.7%

Business-To-Business Magazines

2.1%

3.0%

3.0%

Radio

1.7%

7.3%

7.4%

Network Television

0.6%

15.2%

15.5%

Newspapers2

-0.9%

17.7%

18.4%

Spot TV

-2.8%

10.9%

11.6%

Source: TNS Media Intelligence

1. Internet estimates reflect display advertising only

2. Newspaper estimates do not include web site advertising

Share figures may not add to 100.0% due to rounding

About TNS Media Intelligence

TNS Media Intelligence is the leading provider of strategic advertising intelligence to advertising agencies, advertisers, and media properties. The company's tracking technologies collect advertising expenditure and occurrence data, as well as select creative executions, for more than 2.2 million brands across 20 media. Established in 23 countries with more than 16,000 customers, TNS MI is part of the TNS Group, ranked #2 worldwide in marketing information and the world's largest custom research company. The U.S. headquarters are in New York City with sales locations in major markets throughout the United States. www.tns-mi.com

About TNS

TNS is a market information group:

The world's largest provider of custom research and analysis

A leader in political and social polling

A major supplier of consumer panel, media intelligence and internet, TV and radio audience measurement services.

TNS operates across a global network in over 70 countries, allowing us to provide internationally consistent, up-to-the-minute and high quality information and analysis.

The group's employees deliver innovative thinking and excellent service to local and multi-national clients worldwide. In the custom business, they combine in-depth sector knowledge with expertise in the areas of new product development, positioning and segmentation research, brand and advertising research and stakeholder management.

TNS' strategic goal is to be recognised as the global leader in delivering value added information and insights that help our clients to make more effective decisions.

TNS is the sixth sense of business.

www.tns-global.com

Source: Business Wire

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