“Although total ad spending has turned in a modest year-to-date gain, growth rates over the past six months lag forecast projections by 80-90 basis points,” said Steven Fredericks, president and CEO of TNS Media Intelligence. “Record-setting levels of political advertising, which will also impact fourth-quarter figures, have not been enough to overcome continued weakness within the automotive, retail and travel sectors.”

Ad Spending By Media
Spanish Language Television, leveraging the World Cup event, experienced a 19.1 percent increase in ad spending to $3.22 billion. Internet display advertising posted a 17.9 percent gain to $7.15 billion for the nine month period. Spot TV, propelled by third quarter political advertising, advanced 6.3 percent to $11.95 billion.

Other TV media continued to experience soft demand during the third quarter that dampened year-to-date performance. Network TV finished the period with $16.65 billion in expenditures, up 3.8 percent. Cable Network ad spending of $12.14 billion was a 3.3 percent improvement over same period in 2005.

Local Newspapers saw expenditures for their print editions fall by 3.7 percent to $17.50 billion. Radio media also lagged, down a combined 1.1 percent to an aggregate of $8.09 billion.

Advertising Spending by Media:
Jan-Sep 2006 vs. Jan-Sep 2005¹

Share of Spending By Media
The Internet continues to grow its share of total advertising expenditures. For the first nine months of 2006, the Internet accounted for 6.6 percent of total ad spending, up from 5.8 percent a year ago. Newspapers lost 1.3 share points over this period, slipping to 18.7 percent of expenditures and falling behind magazines.

Share of Advertising Spending by Media:
Jan-Sep 2006 vs. Jan-Sep 2005

Ad Spending by Advertiser
The top 10 advertisers in the first nine months of 2006 spent $13.55 billion, unchanged from the prior year period. Extending outwards to the top 50 advertisers, a group that accounts for one-third of total ad spending, expenditures declined 1.0 percent. Beyond the top 50, outlays advanced a healthy 6.7 percent, continuing a recent trend of middle-tier spenders lifting the overall ad market.

Procter & Gamble maintained its spot atop the rankings with $2.46 billion in spending, up 7.0 percent versus last year. Telecommunication companies continued their aggressive spending with AT&T up 29.3 percent to $1.65 billion and Verizon Communications up 13.9 percent to $1.45 billion.

Leading automotive manufacturers remain a portrait of contrasts. General Motors followed up a second quarter reduction of $270 million with a further cut of $188 million in third quarter. The company’s year-to-date spending of $1.75 billion is off 20.9% from 2005. Daimler Chrysler modestly increased its advertising in third quarter but for the full nine month period its outlays are down 11.2 percent to $982 million. In contrast, Ford Motor Company and Toyota Motor continued to spend vigorously, registering year-to-date gains of 12.2 percent and 9.5 percent, respectively.

Advertising expenditure declines were posted at Time Warner (-14.8 percent), Walt Disney (-4.2 percent) and News Corp. (-7.5 percent). At each of these companies, the reductions came primarily from the movie divisions.

Top Ten Advertisers:
Jan-Sep 2006 vs. Jan-Sep 2005⁸

Ad Spending by Category
Heated competition within the Telecommunications category kept this sector in the top position with $6.85 billion in expenditures, up 13.8 percent. In addition to higher spending from AT&T and Verizon, aggressive marketing by Comcast, Deutsche Telekom and Vonage also contributed to the gain.

Local Services & Amusements became the second largest category, growing 11.0 percent to $6.43 billion. This sector is a potpourri of comparatively small advertisers outside the Top 500 rankings but its collective heft and multi-media budgets have made it an important contributor to the overall advertising economy.

Direct Response (+7.3%), Financial Services (+5.3%) and Restaurants (+4.0%) each posted modest gains.

Automotive category spending remained soft through the first three quarters of 2006. Higher outlays at Ford Motor Company and Toyota Motor were not enough to offset widespread reductions elsewhere. Foreign Auto advertising was down 2.7 percent to $6.34 billion and Domestic Auto fell 11.3 percent to $5.58 billion. Automotive advertising has now declined for five consecutive quarters.

Top Ten Advertising Categories:
Jan-Sep 2006 vs. Jan-Sep 2005 ⁹

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 third quarter of 2006, an average hour of monitored prime time network programming contained 2 minutes, 10 seconds (2:10) of in-show Brand Appearances and 18:19 of commercial messages. The combined total of 20:29 of marketing content represents 34 percent of a prime time hour.

Unscripted reality programming had an average of 6:33 per hour of Brand Appearances as compared to just 0:47 per hour for scripted entertainment programming, such as sitcoms and dramas. Late night network talk shows continue to have even higher levels, averaging 7:48 minutes per hour. The combined load of Brand Appearances and paid commercial messages in these shows exceeded 29 minutes per hour in the third quarter.

Brand Appearances vs. Advertising: Q3 2006
(minutes:seconds per hour)

Over the past year, Brand Appearance time in prime time network programming has been steadily diminishing. To some extent, the time reductions are an outcome of producers and networks exerting more active control over in-program content as the try to move the business model from “product placement” to “brand integration.” However, the trend line also reflects marketers’ cautious use of this communication technique and focuses renewed attention on measurement standards, ROI and the challenge of effectively incorporating brands into TV programming.

Trend in Brand Appearance Time
(minutes: seconds per hour)

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

TNS is a market information group:
• The world’s largest provider of custom research and analysis
• A leader in political and social polling
• A major supplier of consumer panel, media intelligence and internet, TV and radio audience measurement services.

TNS operates across a global network in over 70 countries, allowing us to provide internationally consistent, up-to-the-minute and high quality information and analysis.

The group’s employees deliver innovative thinking and excellent service to local and multi-national clients worldwide. In the custom business, they combine in-depth sector knowledge with expertise in the areas of new product development, positioning and segmentation research, brand and advertising research and stakeholder management.

TNS’ strategic goal is to be recognized as the global leader in delivering value added information and insights that help our clients to make more effective decisions.

TNS is the sixth sense of business.

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