“For the first time since 2001, media advertising expenditures have declined for two consecutive quarters,” said Steven Fredericks, president and CEO of TNS Media Intelligence. “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. 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.”

Ad Spending By Media
Internet display advertising maintained its growth leadership position, registering a 17.7 percent increase to $5.52 billion in expenditures. Consumer magazines posted a 6.9 percent gain to $11.50 billion in advertising. Outdoor expenditures were up 3.6% to $1.90 billion and Cable TV followed with a 2.8 percent increase to $8.38 billion.

Broadcast TV media continued to experience weakness in the second quarter and turned in significant half-year declines. Network TV expenditures fell 3.6 percent to $11.84 billion, while ad spending on Spot TV dropped 5.4 percent to $7.29 billion. Syndication TV was down 5.3 percent to $2.00 billion.

Newspaper and Radio media also saw widening losses during the second quarter. For the half-year period, ad spending in Local Newspapers plunged 5.7 percent to $11.09 billion on a reduction of 4.7 percent in space sold. Marketers lowered their Radio advertising budgets by 2.7 percent, to a total of $5.14 billion.

Advertising Spending by Media:
First Half 2007 vs. First Half 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 jumped to 7.6 percent of total expenditures, up from 6.4 percent a year ago. Magazines gained 0.9 share points and finished the period at 20.0 percent of ad spending. Newspapers lost one full share point and slipped to 17.8 percent of total expenditures. National Television and Local Television each lost share but still accounted for a combined 43.6 percent of all expenditures.

Share of Advertising Spending by Media:
First Half 2007 vs. First Half 2006

Ad Spending by Advertiser
During the first half of 2007, the top 10 advertisers spent a combined total of $9.0 billion, a reduction of 2.2 percent from last year. Second quarter spending for this select group was up slightly, rebounding from a steep 5.1 percent decline during the first three months.

Extending outwards to the top 50 marketers, a more diversified group representing one-third of the measured ad economy, expenditures were down by 1.6 percent for the half year, to $23.3 billion. Outside the top 50, the segment which had been a key industry growth driver leading into 2007, spending rose just 0.4 percent versus last year.

Procter & Gamble maintained its spot atop the rankings with $1,611.8 million in spending, up 1.8 percent from last year on the strength of an 11.7 percent increase during the second quarter. National Amusements posted the largest percent gain among the top 10, up 56.5 percent to $589.8 million, behind higher spending from its movie studio division.

Telecommunication companies claimed three of the top ten spots. AT&T expenditures were off 12.5 percent to $1,100.2 million, reflecting difficult comparisons against a very large re-branding campaign from last year. Increased spending behind core wireless businesses contributed to higher outlays at Verizon Communications (up 8.8 percent, to $1,041.1 million) and Sprint Nextel (up 13.5 percent, to $689.2 million).

General Motors slashed its budgets by over $100 million in the second quarter, marking the fifth consecutive quarter in which expenditures fell by at least 15 percent. It finished the half year with $958.9 million in spending, a 25.1 percent decline versus a year ago. At Time Warner, the virtual elimination of advertising support for the AOL service led to a 7.9 percent reduction in total advertising, to $793.3 million. Johnson & Johnson spending tumbled by 9.1 percent, to $725.9 million, on cutbacks across its brand portfolio of health and beauty aids.

Top Ten Advertisers:
First Half 2007 vs. First Half 2006¹

Ad Spending by Category
The Top 10 advertising categories in the first half of 2007 spent an aggregate $36.47 billion, down 0.5 percent from a year ago. Financial Services maintained its top position with $4.49 billion in expenditures, up 3.5 percent. Higher spending from retail banks offset reductions by credit card brands.

Direct Response had the largest percentage gain, up 11.3 percent to $3.54 billion. The category showed deep strength with higher ad spending levels across a broad range of brands. Personal Care Products advanced 6.7 percent, led by resurgent spending from several top advertisers. Local Services & Amusements (+2.1 percent) and Restaurants (+0.8 percent) achieved small gains.

Advertising spending in the telecommunications category contracted by 6.3 percent to $4.46 billion. This was mainly due to lower expenditures from AT&T, Vonage Holdings and the AOL division of Time Warner. The persistent malaise in the automotive category pushed Non-Domestic Auto down 6.1 percent to $3.92 billion and Domestic Auto down 10.8 percent to $3.39 billion. Automotive advertising has now declined for eight consecutive quarters.

Travel & Tourism advertising improved during the second quarter but still finished the half-year down 1.2 percent, to $2.85 billion.

Top Ten Advertising Categories:
First Half 2007 vs. First Half 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 second quarter of 2007, an average hour of monitored prime time network programming contained 8 minutes, 4 seconds (8:04) of in-show Brand Appearances and 17:25 of commercial messages. The combined total of 25:29 of marketing content represents 42 percent of a prime-time hour.

Unscripted reality programming had an average of 11:52 per hour of Brand Appearances as compared to just 5:34 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows had even higher levels, averaging 14:12 per hour. The combined load of Brand Appearances and ad messages in these shows reached 35:55 per hour, or 60 percent of total content time.

Brand Appearances vs. Advertising: Q2 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 TNS, the global marketing insight and information group. TNS Media Intelligence monitors 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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