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

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Andrew Foote
Peppercom
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News

January 8, 2007

TNS Media Intelligence Forecasts 2.6 Percent Increase in U.S. Advertising Spending for 2007
Internet to Continue Double Digit Growth, With Syndicated TV, Outdoor and Magazines Higher Than Market Average

New York, NY, January 8, 2007 – 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be the third consecutive year in which the advertising sector more closely tracks growth in real GDP as opposed to its historical reference mark of nominal GDP,” added Fredericks.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

YEAR	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%	15.0%
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

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