Ad Spending Increases Again, Report Finds

Advertising spending is continuing to recover from the recession and financial crisis, according to a report released Monday morning, although the rate of growth is slowing.

The report, by Kantar Media, part of WPP, found that ad spending in major media in the United States in the first quarter rose 4.4 percent from the same quarter a year ago. The percentage gain is the fifth quarterly increase in a row since the end of 2009, but it is the smallest of the five.

That is not necessarily a red flag, according to Kantar. As the bounceback from hard times goes on, the quarterly results are up against tougher comparisons versus the previous year.

“We’re now comparing against stronger numbers from a year ago,” said Jon Swallen, senior vice president for research at the Kantar Media Intelligence North America unit of Kantar.

“A year and a half into a recovery, that’s not an unusual pattern to see stronger growth at the outset,” he said.

Another signal that Madison Avenue may not need to be anxious is that “we’re seeing growth across a very broad spectrum of advertisers,” Mr. Swallen said.

“More than two-thirds of advertisers are increasing budgets compared with a year ago,” he added.

The 4.4 percent increase in the first quarter comes after the four consecutive quarterly gains in 2010 compared with the same periods of 2009: 7 percent in the fourth quarter, 8.7 percent in the third quarter, 5.4 percent in the second quarter and 5.1 percent in the first quarter.

Although most advertisers are continuing to spend more, they are still shying from newspapers and newspaper-related media, the Kantar report shows.

Of the seven categories of media tracked in the first quarter, only two were down from the same period a year ago: newspapers, down 2.1 percent, and free-standing inserts, mostly distributed through newspapers, down 17.5 percent.

Within the newspaper category, ads in local newspapers declined 1.1 percent. It was the 22nd consecutive quarter of negative results, Kantar said.

Ads in national newspapers fell 7.5 percent compared with the first quarter of 2010, according to the report, and ads in Spanish-language papers declined 7.4 percent.

The media category with the largest percentage gain was Internet display ads, up 14.6 percent, followed by outdoor ads, up 12.5 percent; television, up 5.3 percent; and magazines, up 4.5 percent.

The media subcategory with the biggest percentage increase was cable television, up 31.9 percent, followed by Spanish-language magazines, up 22.3 percent.

Turning to ad spending by categories of advertisers, there were gains in eight of 10 categories in the first quarter, just as there was in the fourth quarter of 2010.

The category with the biggest increase was insurance, up 29 percent, reflecting the intense competition among auto insurers.

Insurance was, appropriately, followed by automotive, up 23 percent. (Automotive is the largest ad category of all.) Within the auto category, ad spending by automakers climbed 24.2 percent, the report said, and ad spending by auto dealers rose 20.6 percent.

The increases for auto ad spending are “beginning to slow down just a little bit,” Mr. Swallen said, “and we see that extending into the beginning of the second quarter as well.”

Some of the slowdown was related to the effects of the Japan earthquake and tsunami on supplies of cars made in Japan, he added.

As for the advertisers that spend all the money, Procter & Gamble led the list of the top 10, as it often does. Procter spent $719.8 million in the first quarter, the report said, down 5.9 percent from $765 million spent in the first quarter of last year.

Of the top 10 spenders, seven spent more than they did a year ago. They include the Chrysler Group, up 58.6 percent; Toyota Motor, up 30.3 percent; Ford Motor, up 27.3 percent; L’Oreal, up 14.1 percent; AT&T, up 6.9 percent; and General Motors, up 1.3 percent.

Another bigger spender, the Comcast Corporation, has a virtual asterisk next to its name.

Comcast’s ad spending rose 47.7 percent, vaulting the company into the top 10, because of its acquisition of NBCUniversal. The ad spending for Universal movies and other NBCUniversal properties is now added to Comcast’s totals.

The other decliners in the top 10, in addition to Procter, were Verizon Communications, down 24.4 percent, and Pfizer, down 11.1 percent.

The top 10, in descending order of total first-quarter spending, are: Procter, AT&T, General Motors, Comcast, Verizon, Pfizer, Chrysler, Toyota, Ford and L’Oreal.