Kantar Media Reports Q1 2015 U.S. Advertising Expenditures Decreased 4.0 Percent from Q1 2014 Olympic Spend Levels

Core ad spending, however, declined by just 2.0 percent; Paid Search, included in Kantar Media’s analysis for the first time, shows 7% increase year-over-year

NEW YORK--(BUSINESS WIRE)--Total U.S. advertising expenditures declined 4.0 percent in the first quarter of 2015 to $37.4 billion, according to data released today by Kantar Media, the leading provider of strategic advertising and marketing information.

The data includes, for the first time, Paid Search expenditures from Kantar Media’s search marketing intelligence division, AdGooroo. Paid Search advertising has been factored into both the Q1 2014 and Q1 2015 analysis; this data will be included in Kantar Media’s quarterly analysis going forward.

“First quarter results are skewed by comparisons to last year and the $600 million of incremental spend generated by the Sochi Olympics,” said Jon Swallen, Chief Research Officer at Kantar Media North America. “Excluding the impact of special events, core ad spending measured by Kantar Media was down about 2 percent in the period. Even after taking into account assumptions about the growth of spend on other unmonitored media, it has been a relatively slow start for the ad market in 2015.”

Measured Ad Spending By Media

Sixteen of the 21 individual media types monitored by Kantar Media had lower ad spending in the first quarter. These results are consistent with the ongoing shift of ad budgets towards unmeasured digital media, as well as a general slowing of advertising activity.

Among television media, expenditures on Cable networks grew 4.1 percent. A primary reason for the gain was a 3.8 percent increase in the amount of available paid ad time as networks packed more spots into programming to help offset lower audience ratings. The inaugural College Football Playoff in January was another important growth source. Ad spending on Spanish Language TV increased 4.8 percent. The number of national brands purchasing time on Hispanic stations continues to expand and this demand contributes to spending growth.

Network TV expenditures declined 9.2 percent in Q1 compared to a year ago period, which featured the Winter Olympics. If the incremental ad spending contributed by this event is excluded, Network TV was flat versus last year. Spot TV, which has a biennial business cycle tied to Olympics and political advertising in even-numbered years, saw ad spending fall by 6.8 percent. Syndication expenditures were 4.9 percent lower.

Starting with this quarterly report, Kantar Media is including Paid Search in our tabulations of Digital Media. Ad spending for Paid Search, which reflects text ads on the Google and Bing search engines, rose 7.0 percent in Q1. Automotive, financial service, media and retail advertisers led the way. Expenditure for Online Display, which is based upon desktop display ads only and excludes video and mobile ad formats, declined 8.7 percent compared to last year. The main factors were lower CPMs and reduced page traffic. The latter is likely attributable to mobile devices siphoning some desktop usage.

Print media showed a 7.3 percent decline in expenditures for Consumer Magazines, while. ad spending in Sunday Magazines decreased by 32.3 percent in Q1. . Expenditures were down 16.0 percent in Local Newspapers and 13.5 percent in National Newspapers on broadly lower spending among auto, financial, retail and telecom marketers. (Note all figures for print media are based solely on print channels and do not include websites, apps or other properties operated by print publishers).

Radio advertising in Q1 was characterized by gains for the local market sector and declines within the national segment. Hispanic Local Radio expenditures increased 6.5 percent and English-language Local Radio was up 5.0 percent, paced by higher spending from auto dealers, legal services, and health care providers. Network Radio decreased 2.0 percent and National Spot Radio fell 11.3 percent.

Outdoor expenditures rose 2.9 percent in the first quarter. Growth was heavily concentrated in the Top 15 population markets and within this geographic footprint digital signage was a primary driver of higher spending. As we have commented in previous reports, digital inventory gives advertisers more flexibility when purchasing outdoor space and allows operators to earn a higher price.

Percent Change in Measured Ad Spending^1
MEDIA CHANNEL	Jan - Mar
• Media Type	2015 vs. 2014
(Listed in rank order of Q1 2015 spending)
TELEVISION MEDIA	-3.0%
• Cable TV^2	4.1%
• Network TV	-9.2%
• Spot TV^3	-6.8%
• Spanish Language TV^4	4.8%
• Syndication – National	-4.9%
DIGITAL MEDIA	0.0%
• Paid Search^5	7.0%
• Online Display (PC Desktop Only)^6	-8.7%
MAGAZINE MEDIA^7	-8.7%
• Consumer Magazines	-7.3%
• B-to-B Magazines	-4.1%
• Sunday Magazines	-32.3%
• Local Magazines	-3.9%
• Spanish Language Magazines	-19.0%
NEWSPAPER MEDIA^8	-15.4%
• Local Newspapers	-16.0%
• National Newspapers	-13.5%
• Spanish Language Newspapers	-3.2%
RADIO MEDIA^9	-0.1%
• Local Radio^10	5.0%
• National Spot Radio	-11.3%
• Network Radio	-2.0%
• Hispanic Local Radio^11	6.5%
OUTDOOR	2.9%
FSIs^12	-3.5%
TOTAL	-4.0%

Source: Kantar Media
1.	Figures are based on the Kantar Media Stradegy™ multimedia ad expenditure database across all measured media, including: Network TV ( 5 networks); Spot TV (748 stations in 125 DMAs); Cable TV ( 76 networks); Syndication TV; Hispanic Network TV (5 networks); Consumer Magazines (170 publications); Business-to-Business Magazines (296 publications); Sunday Magazines (8 publications); Local Magazines (29 publications); Hispanic Magazines (13 publications); Paid Search (Google & Bing search engines); Internet display (3,016 sites monitored at least one year); Local Newspapers (134 publications); National Newspapers (3 publications); Hispanic Newspapers (42 publications); Local Radio (692 stations in 36 markets); Hispanic Local Radio (85 stations in 24 markets);Network Radio (5 networks); National Spot Radio (205 markets); and Outdoor (183 markets). Figures do not include public service announcements (PSA) or house advertising
2.	Cable TV figures are based on 71 English language networks and do not include any Hispanic cable networks
3.	Spot TV figures are based on 668 English language stations and do not include any Hispanic stations
4.	Spanish Language TV includes 5 Hispanic broadcast networks, 5 Hispanic cable networks and 80 local Hispanic TV stations
5.	Paid Search figures are based on desktop text ads. Product Listing Ad format is excluded. Data are provided by Kantar Media’s AdGooroo.
6.	Online display expenditures reflect the value of desktop display advertising only. Video ad formats and mobile ad formats are specifically excluded.
7.	Magazine Media includes Publishers Information Bureau (PIB) data and reflects print editions of publications
8.	Newspaper Media figures reflect print editions of publications
9.	Radio Media figures only reflect commercial spot sales
10.	Local Radio expenditures are based on English language stations in 36 markets
11.	Hispanic Local Radio expenditures are based on Spanish language stations in 24 markets
12.	FSI data represents distribution costs only. Data are provided by Marx ProMotion Services.

Measured Ad Spending By Advertiser

Spending by the ten largest advertisers declined 10.6 percent in the first quarter of 2015, to $3,709.8 million. Among the Top 100 marketers, a diversified group accounting for two-fifths of all measured ad expenditures, budgets fell 6.6 percent.

The year-ago period includes the Sochi Winter Olympics and this affects ad spending comparisons for companies that had big positions in the TV coverage of the event. Olympic TV advertisers are noted in the ranking table below.

Procter & Gamble was the largest advertiser in Q1 with media expenditures of $570.9 million, a decline of 24.5 percent. Its measured investments in TV, online display and print media were all lower, which is consistent with recent company statements about shifts in their advertising budgets.

Deutsche Telekom, which controls the T-Mobile wireless brand, had the largest growth rate among the Top Ten. The company increased spending by 34.8 percent to $269.8 million, including a celebrity-focused campaign around the Super Bowl, which introduced the tagline “the Un-Carrier”. By comparison, AT&T reduced its spending 24.6 percent to $404.6 million. Since the May 2014 announcement of its $49 billion merger with DirecTV, AT&T’s annualized rate of ad investment has dropped by $380 million. Verizon Communications lowered its ad spending in Q1 by 25.3 percent to $277.0 million.

Marketing support for a deep list of theatrical movie releases contributed to solid spending increases at Comcast (up 10.4 percent to $464.8 million) and Time Warner (up 13.5 percent to $276.6 million). Pfizer was also prominent, raising expenditures 13.1 percent to $400.8 million. It was the eighth consecutive quarter of year-over-year spending growth for the company.

General Motors was the only automotive company to land in the Top Ten. It spent $411.4 million during the first quarter, a decrease of 30.8 percent compared to the prior year. With the steep drop in gasoline prices spurring the sales of higher-margin SUVs and pickup trucks, GM has rapidly shifted its marketing focus. In Q1 2015 more than 70 percent of its media budget was directed against light trucks compared to 56 percent as recently as the summer of 2014.

Top Ten Advertisers of Q1 2015^1
Rank	Company	Jan-Mar 2015 ($ Millions)	Jan-Mar 2014 ($ Millions)	% Change	Q1 2014 Olympic Ad Spend ($ millions)
1	Procter & Gamble Co	$570.9	$755.8	-24.5%	$55
2	Comcast Corp	$464.8	$421.0	10.4%	$14
3	General Motors Corp	$411.4	$594.5	-30.8%	$142
4	AT&T Inc	$404.6	$536.9	-24.6%	$68
5	Pfizer Inc	$400.8	$354.4	13.1%	$13
6	Berkshire Hathaway Inc	$367.0	$331.0	10.9%	$15
7	Verizon Communications Inc	$277.0	$370.9	-25.3%	n/a
8	Time Warner Inc	$276.6	$243.8	13.5%	$15
9	Deutsche Telekom Ag	$269.8	$200.2	34.8%	n/a
10	L'Oreal Sa	$266.6	$342.0	-22.0%	n/a
	TOTAL^2	$3,709.8	$4,150.5	-10.6%
Source: Kantar Media
1. Figures do not include FSI, House Ads, PSA, Online Video or Mobile activity
2. The sum of the individual companies can differ from the total shown due to rounding

Measured Ad Spending By Category

Expenditures for the ten largest categories declined 5.8 percent in the first quarter of 2015 to $18,697.8 million. Eight of the ten categories experienced reductions.

Automotive was the top category with spending of $3,345.9 million, a decrease of 11.0 percent versus last year. Manufacturers raised budgets for truck and SUV models by about 2 percent while slashing expenditures for car models by 20 percent. Dealer spending declined 7.4 percent.

Retail ad expenditures fell 9.6 percent to $3,088.9 million. Higher spending from apparel retailers was more than offset by reductions among consumer electronics and department stores. Insurance category spending was down 8.9 percent to $1,529.9 million as six of the top seven property and casualty underwriters cut back on media advertising.

The Financial Service category reduced its expenditures by 7.6 percent to $1,829.7 million. Credit card marketers continued to pull back on advertising budgets during the quarter, even as consumer credit card debt is on the rise. During the run-up to April 15^th tax filing, investment houses spent less money promoting IRA products than last year, while tax preparation services significantly expanded their marketing efforts.

Just two of the ten largest categories posted spending increases in the first quarter. Expenditures for Telecom grew 3.8 percent to $2,171.8 million with robust spending growth from satellite and TV advertisers counterbalancing reduced investments by leading wireless service providers. With the telecom industry heading toward a period of further consolidation, the profile and composition of category ad spending will likely change as a result.

Pharmaceutical advertising expenditures also rose in the period, up 9.6 percent to $1,194.2 million. Well-funded marketing launches for several prescription drugs were responsible for more than one-half of the growth.

	Top Ten Advertising Categories of Q1 2015^1
	Rank	Category	Jan-Mar 2015 ($ Millions)	Jan-Mar 2014 ($ Millions)	% Change
	1	Automotive	$3,345.9	$3,761.0	-11.0%
		• (Manufacturers)	($2,113.7)	($2,430.5)	-13.0%
		• (Dealers)	($1,232.1)	($1,330.5)	-7.4%
	2	Retail	$3,088.9	$3,418.8	-9.6%
	3	Telecom	$2,171.8	$2,092.9	3.8%
	4	Financial Services	$1,829.7	$1,979.4	-7.6%
	5	Restaurants	$1,600.8	$1,683.6	-4.9%
	6	Insurance	$1,529.9	$1,678.6	-8.9%
	7	Non Rx Remedies	$1,520.4	$1,526.4	-0.4%
	8	Food	$1,246.2	$1,368.3	-8.9%
	9	Pharmaceuticals	$1,194.2	$1,089.9	9.6%
	10	Travel & Tourism	$1,169.8	$1,245.7	-6.1%
		TOTAL	$18,697.8	$19,844.6	-5.8%
Source: Kantar Media
1. Figures do not include FSI or PSA activity
2. The sum of the individual categories can differ from the total shown due to rounding

About Kantar Media

Kantar Media provides critical information that helps our clients make better decisions about communications. We enable the world’s leading brands, publishers, agencies and industry bodies to navigate and succeed in a rapidly evolving media industry. Our services and data include analysis of paid media opportunities; counsel on brand reputation, corporate management and consumer engagement through owned media; and evaluating consumers’ reactions in earned media. As the global house of expertise in media and marketing information, Kantar Media provides clients with a broad range of insights, from audience research, competitive intelligence, vital consumer behavior and digital insights, marketing and advertising effectiveness to social media monitoring. Our experts currently work with 22,000 companies tracking over 4 million brands in 50 countries.

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