Total Ad Spending Slows for the First Time Since 2001

By E&P Staff

Published: September 11, 2007 11:15 AM ET
NEW YORK Total U.S. advertising expenditures fell 0.3% to $72.5 billion for the first half of 2007, according to TNS Media Intelligence. It's the first time since 2001 that ad spending declined for two consecutive quarters.

"While the protracted downturn in automotive spending has been a prime contributor, the overall results reflect weakness across a wide range of industries and advertisers," Steven Fredericks, president and CEO of TNS Media Intelligence, said in a statement. "Given the uncertainties about near-term economic growth and consumer spending, we expect core ad spending will continue to face challenges during the second half of the year."

Newspapers recorded the largest drops in ad spending compared to other media measured by TNS. Overall, ad expenditures dropped 5.8% to $12.9 billion. Local newspapers experienced a decrease of 5.8% to $11 billion while ad expenditures in the nationals were down 6.4% to $1.6 billion. In Spanish language papers, ad spending slipped 4.4% to $172 million.

Spending on the Internet soared 17.7% to $5.5 billion.

Newspapers lost share as well, according to the report: 17.8% of advertising is spent in newspapers, down from 18.8% from the same period a year ago. The Internet increased its share edging out radio. Ad spending on the Internet was up 7.6% compared to 6.4% for the same period a year ago. Radio's share fell 7.1% from 7.3%.