“After a sluggish January, the pace of advertising expenditures picked up slightly at the end of the quarter,” said Steven Fredericks, president and CEO of TNS Media Intelligence. “We also must recognize that 2007 first quarter results are adversely affected by comparisons against last year’s Winter Olympics. However, after factoring out the incremental contribution of special events, it is apparent that core growth rates have slowed further from last year’s lackluster levels.”

Ad Spending By Media
Only six of the 19 measured media registered year-over-year gains in the first quarter. Internet display advertising posted a 16.7 percent increase to $2.70 billion, as marketers continued to expand their online programs. Consumer magazines advanced 7.1 percent to $5.17 billion on the strength of higher rate card pricing and a modest uptick in page counts. Cable Network expenditures were up 6.3% to $3.82 billion, with niche interest channels pacing ahead.

Broadcast TV comparisons were adversely affected by the absence of the biennial Olympic Games event. Network TV ad spending tumbled 7.2 percent to $6.05 billion while Spot TV expenditures slipped 4.1 percent to $3.74 billion.

Newspaper and Radio media continued to significantly lag the overall market. Expenditures for Local Newspapers fell 4.6 percent to $5.39 billion on persistently weak demand from the auto, telecom and real estate categories. Radio spending declined 2.1 percent to $2.29 billion.

Advertising Spending by Media:
Q1 2007 vs. Q1 2006 ¹

Share of Spending By Media
While total ad expenditures declined by 0.3 percent, there was unusually wide variation around this average from individual media types. As a direct result, changes in share of spending by media type were more pronounced than normal. Internet display advertising surged to 7.7 percent of total expenditures, up from 6.6 percent a year ago. Magazines gained 0.9 share points and finished the period at 19.2 percent of ad spending, swapping places in the rankings with Newspapers, which lost 0.8 points. Television lost 1.1 share points but still accounted for 44.6 percent of all expenditures.

Share of Advertising Spending by Media:
Q1 2007 vs. Q1 2006

Ad Spending by Advertiser
The top 10 advertisers in the first quarter of 2007 spent a combined total of $4.36 billion, an 8.0 percent reduction from last year as market leaders in key industry segments pared their budgets. Across the top 50 companies, a more diversified group of marketers representing one-third of all ad expenditures, spending fell by 1.4 percent. Beyond the top 50, the segment which has recently been propping up the overall ad market, spending rose just 0.3 percent during the period.

Procter & Gamble maintained its spot atop the rankings with $722.7 million in spending, down 8.6 percent versus a year ago on cutbacks within its portfolio of health and beauty aid products. Lower rates of spending behind theatrical movies contributed to spending declines at Time Warner (down 7.3 percent) and Walt Disney (down 4.6 percent).

Among telecommunication companies, AT&T reduced its advertising budgets by 19.2 percent to $512 million, reflecting comparisons against a period of inflated spending when AT&T launched a massive re-branding campaign. Verizon Communications hiked expenditures by 5.9 percent to $459.3 million and Sprint Nextel kept pace with a 7.8 percent increase to $340.1 million.

General Motors slipped to the number three spot and finished the period with $480.9 million in spending, a 30.9 percent decline versus a year ago and the fourth consecutive quarter in which its media budgets fell by at least 25 percent. At Ford Motor Company, expenditures rose 3.0 percent to $421.4 million while Daimler Chrysler increased its spending by 12.7 percent, to $336.4 million.

Top Ten Advertisers:
Q1 2007 vs. Q1 2006¹

Ad Spending by Category
The Top 10 advertising categories in the first quarter of 2007 spent an aggregate $16.74 billion, down 1.1 percent from a year ago. Financial Services was the top category at $2.11 billion, an increase of 3.1 percent. Higher budgets from stock brokerages and mutual funds more than offset reductions by credit card companies.

Direct Response had the largest percentage gain, up 11.3 percent to $1.70 billion. The category showed deep strength with higher ad spending levels by a broad range of brands. Restaurants (+1.5 percent) and Personal Care Products (+1.2 percent) eked out small gains.

Telecommunications category spending dropped 7.6 percent to $2.10 billion, principally due to lower expenditures from AT&T and Vonage Holdings. Continued weakness in ad spending by local dealers and dealer associations pushed Domestic Auto down 10.8 percent to $1.67 billion and Non-Domestic Auto down 4.1 percent to $1.82 billion. Automotive advertising has now declined for seven consecutive quarters.

Travel & Tourism advertising fell 5.0 percent to $1.25 billion on widespread declines by cruise lines, airlines, hotels and online travel reservation services.

Top Ten Advertising Categories:
Q1 2007 vs. Q1 2006

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 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 first quarter of 2007, an average hour of monitored prime time network programming contained 6 minutes, 22 seconds (6:22) of in-show Brand Appearances and 16:49 of commercial messages. The combined total of 23:11 of marketing content represents 39 percent of a prime-time hour.

Unscripted reality programming had an average of 10:50 per hour of Brand Appearances as compared to just 4:26 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows had even higher levels, averaging 12:32 per hour. The combined load of Brand Appearances and ad messages in these shows reached 33:30 per hour, or 56 percent of total content time.

Brand Appearances vs. Advertising:
Q1 2007
(minutes:seconds per hour)

About TNS Media Intelligence
Established in 23 countries with more than 16,000 customers, TNS Media Intelligence is part of the TNS Group, ranked #2 worldwide in marketing information. TNS Media Intelligence monitors more than 3 million brands worldwide across a multitude of media, including TV, radio, print, Internet, cinema and outdoor. The company offers a full range of insights and analyses, including the tracking of advertising expenditures and advertising creative, as well as news and social media monitoring and sports sponsorship evaluation.

In the U.S., 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 2.8 million brands across 20 media in North America. 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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