Right Nice Bump for Third Quarter Advertising

Medialife Magazine Media Economy By Bill Cromwell December 12, 2012 After a disappointing start to the year, U.S. advertising kicked up in third quarter, reflecting strong spending on the Olympics and the election. Third-quarter ad spending grew by 7 percent, according to Nielsen data released this morning, far outpacing the modest 2.4 percent growth recorded during second quarter of this year. Year to date ad spending is up 2.5 percent, with slow growth during the first half of the year that had some worried the media economy could slip back into decline. But third quarter yielded strong results, partly because of the two biannual events that attracted some of their strongest numbers ever. Political advertising kicked up in third quarter as the elections neared, with more than a billion dollars spent on spot television. And the Summer Olympics produced stronger-than-expected advertising. Ratings were higher than NBCUniversal had anticipated for the Games, and advertisers clamored to get their ads in once they’d seen those strong numbers, allowing the company to charge higher prices. But, in a promising development for the ad economy going forward, the growth wasn’t only built on political and Olympic spending. Several ad categories saw big ad spending kickups, most notably automotive manufacturers, which finished as the quarter’s biggest spender at $2.7 billion, up 26 percent over last year. Six of the top 20 advertisers during third quarter were manufacturers. Auto dealerships, meanwhile, finished third in total spending, up 22 percent to $1 billion. “Model year-end promotions traditionally make the third quarter the biggest of the year based on ad sales,” notes Nielsen. Other big gainers included fast food restaurants, up 14 percent to $1 billion; wireless/telecom, up 15 percent to $887.3 million; and department stores, up a scant 1 percent to $772.8 million. Movies and pharmaceuticals, while still finishing among the top seven advertisers, pulled back on spending. Movies were down 12 percent, to $689.7 million, and pharmaceuticals plummeted 22 percent, to $661.7 million. Nielsen data is based on seven media spending categories: TV, magazines, newspapers, radio, outdoor, FSI coupon and national internet. Fourth quarter numbers are also expected to be strong when they come out next year, based on the huge increase in political spending in the final month of the campaign, with spot television alone generating more than $1 billion. But buyers remain uncertain whether the boom will continue into January, with their clients concerned that fiscal cliff worries will prompt people to reign in their spending after a better-than-expected holiday season for retailers.