“Advertising expenditure percentage growth through September is in line with our original 2005 forecast of 2.9 percent,” said Steven Fredericks, President and CEO of TNS Media Intelligence. “It is important to recognize that when we factor out the incremental 2004 ad volume attributed to the Olympics and the Elections, core ad spending grew by approximately 4.5 percent during the January to September period and 3.9 percent during the third quarter.”

TNS MI estimates the third quarter losses in measured local media ad spending due to Hurricanes Katrina and Rita were $15-$20 million; about one tenth of one percent of the $13.3 billion spent on local media during the quarter.

Ad Spending by Media
The majority of 19 media measured by TNS MI experienced growth during the first nine months of 2005. Cable TV demonstrated the largest growth, up 12.2 percent to $11.5 billion behind the ongoing strength of thematic, special interest networks. News channels have recently under performed due to the absence of political advertising, trimming the increase in total ad spend for the medium.

In addition, Internet display advertising continued to expand, up 11.5 percent to $6.1 billion for the first three quarters of the year. The engines of growth were the ongoing reallocation of budgets by large, blue chip advertisers and resurgent spending by dot com brands. For the first time since the dot com bust, online brands accounted for a majority of Internet ad spending.

Local Newspaper led with most total dollars spent at $18.3 billion, up 2.5 percent compared to the same period in 2004. Network TV was the second leading category with $16.1 billion. This figure was down 1.9 percent when compared to the same period in 2004, which was buoyed by the Summer Olympics.

Ad Spending by Media: Jan-Sept. 2005 vs. Jan-Sept. 2004¹

Other companies with strong advertising expenditure growth included Time Warner Inc., up 10.2 percent to $1.4 billion; Johnson & Johnson, up 14.7 percent to $1.1 billion; and Pepsico, up 21.9 percent to $935 million. The largest decrease among the top 10 advertisers was SBC Communications, with a 16.3 percent drop to $1.1 billion on cutbacks in its wireless divisions leading up to their merger with AT&T.

Top Ten Advertisers: Jan-Sept. 2005 vs. Jan-Sept. 2004⁸

Ad Spending by Category
The automotive industry continued to dominate spending during the first three quarters of 2005. Non-Domestic Auto was the leading category with over $6.3 billion in expenditures, down 1.7 percent compared to the same period in 2004. Domestic Auto posted a 0.8 percent decrease to $6.1 billion with reductions concentrated towards the end of third quarter and associated with the winding down of “employee pricing” promotions.

Direct Response was the category with the strongest growth, up 17.5 percent to $4.4 billion and has now recorded seven consecutive quarters of double digit gains. Additional categories with strong growth included Restaurants, up 6.6 percent to $3.6 billion, and Financial Services, up 5.7 percent to $5.7 billion.

Top Ten Advertising Categories: Jan-Sept. 2005 vs. Jan-Sept. 2004⁹

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.

www.tns-global.com