“The rate of growth in advertising expenditures weakened slightly in the fourth quarter, as consumers and businesses turned a bit more cautious,” said Jon Swallen, senior vice president, Research of TNS Media Intelligence. “Large blue chip advertisers, as a group, have recently cut back their ad budgets. The growth is currently coming from outside the Top 100 marketers.”

Ad Spending by Media
The majority of 19 media measured by TNS MI experienced growth during 2005. Internet display advertising registered the largest gain, up 13.3 percent to $8.3 billion on the strength of accelerated spending from dot-com brands. For the year, these online brands accounted for 49.7 percent of total internet expenditures, the highest level since the dot-com bust.

In addition, Cable TV advanced sharply, up 11.4 percent to $15.9 billion as it continued to take share from other national media. Other notably strong performers were Outdoor, up 9.8 percent to $3.5 billion, and Consumer Magazines, up 7.5 percent to $21.7 billion on the strength of higher rate card pricing.

Local Newspaper led with most total dollars spent at $25.1 billion, up 1.1 percent compared to 2004. Network TV was the second leading category with $22.5 billion, a decline of 0.3 percent versus the Summer Olympic year of 2004. In the fourth quarter, a period unaffected by Olympic comparisons, Network TV achieved modest growth of 4.0 percent.

Ad Spending by Media: Full Year 2005 vs. Full Year 2004¹

Ad Spending by Advertiser
The top 10 advertisers of 2005 spent $18.6 billion, a drop of 3.3 percent compared to 2004. Spending by these elite companies softened noticeably in the fourth quarter, with eight of the ten registering declines.

Procter & Gamble, with Gillette now counting towards the parent company total, regained the top spot with $3.2 billion in spending, down 4.6 percent on a like-for-like basis against 2004. General Motors holds the second position with $3.0 billion in spending, up 7.1 percent. Verizon Communications had the largest growth rate among the top ten, up 8.5 percent.

The largest decrease among the top 10 advertisers was AT&T, with a 26.4 percent drop to $1.6 billion on cutbacks in its wireless divisions associated with the SBC Communications merger. Daimler Chrysler reduced its 2005 advertising outlays by 12.8 percent to $1.6 billion. The drop was spread across all its major nameplates.

Top Ten Advertisers: Full Year 2005 vs. Full Year 2004¹

Ad Spending by Category
While automotive continued as the dominant ad spending category in 2005, the segment turned in its first full year decline since 2001. Non-Domestic Auto, with over $8.7 billion in expenditures, was down 1.9 percent compared to 2004. Domestic Auto spending weakened sharply in the last quarter and posted a full year decrease of 3.7 percent to $8.5 billion.

Direct Response was the category with the strongest growth, up 15.1 percent to $6.1 billion and has now recorded eight consecutive quarters of double digit gains. Additional categories with strong growth included Financial Services, up 8.1 percent to $8.3 billion, and Restaurants, up 5.7 percent to $4.9 billion.

Top Ten Advertising Categories: Full Year 2005 vs. Full Year 2004¹

Branded Entertainment
TNS Media Intelligence continuously monitors Branded Entertainment within network prime time and late night programming. The tracking identifies Brand Appearances and measures their duration and attributes. Given the short length of many Brand Appearances, duration is a more relevant metric than a simple count of occurrences for quantifying and comparing the gross amount of brand activity that viewers are potentially exposed to in the program versus in the commercial breaks.

In the fourth quarter of 2005, an average hour of prime time network programming contained 4 minutes, 24 seconds (4:24) of in-show Brand Appearances as compared to 17:35 of commercial messages, a ratio of just 25 percent. Reality programming had an average of 11:05 minutes per hour of Brand Appearances as compared to just 3:07 per hour for scripted entertainment programming, such as sitcoms and dramas. Both figures are far less than the comparable volume of regular advertising time.

Brand Appearances vs. Advertising: Average Levels Q4 2005

Top Programs: Brand Appearance TimeQ4 2005

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 19 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.

About TNS
TNS is a market information group. We are the world’s largest custom research company and a leading provider of social and political polling. We are also a major supplier of consumer panel, TV audience measurement and media intelligence services.

TNS operates a global network spanning 70 countries and employs over 13,000 people. We provide market information and measurement, together with insights and analysis, to local and multinational organizations.

We combine our specialist sector knowledge with expertise in the areas of new product development, motivational research, brand and advertising research and stakeholder management to bring our clients up-to-the minute, internationally consistent information.

We think differently to help our clients build competitive advantage, making TNS the sixth sense of business.

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