“The anemic growth rates in measured ad spending reflect a market that is under stress from cyclical business conditions and fundamental structural changes,” said Jon Swallen, SVP Research of TNS Media Intelligence. “Deepening concerns about lower corporate profits, a softening economy and reduced consumer spending have prompted marketers to be cautious with their advertising budgets. The ongoing shift of money towards untracked digital alternatives also contributes to the present slowdown in measured spending.”

Measured Ad Spending By Media
Internet display advertising continued to lead the market, increasing 17.2 percent to $8.4 billion in expenditures. Consumer magazines posted a 6.4 percent gain to $17.3 billion on flat ad page volume. Cable TV spending was up 4.7 percent to $12.7 billion and Outdoor advanced by 4.4 percent to $3.0 billion.

Broadcast TV media continued to experience weakness in the third quarter and turned in nine month spending declines even as the volume of ad time sold increased slightly. Spot TV expenditures, facing progressively more difficult comparisons against record-setting levels of 2006 political advertising, tumbled 6.8 percent to $11.2 billion. Network TV was down 3.0 percent to $16.2 billion despite an increase in ad time. Syndication TV fell 4.6 percent to $3.0 billion.

Advertising expenditures in Newspaper and Radio media remained soft during the third quarter. For the year-to-date period, marketers lowered their Local Newspaper spending by 5.1 percent to $16.6 billion with a commensurate reduction in ad space. Radio expenditures slipped 1.8 percent, to a total of $8.0 billion.

Measured Advertising Spending by Media: Jan-Sep 2007 vs. Jan-Sep 2006¹

Share of Measured Spending By Media
Directional shifts in measured ad spending are illustrated and summarized by the share allocations of individual media types. Internet display advertising gained 1.1 share points and finished the period at 7.7 percent of total expenditures. Magazines accounted for 20.2 percent of measured spending, up from 19.3 percent a year ago. The offsetting share declines came from Newspapers (down 1.0 share point to 17.8 percent) and Local TV (down 0.8 share points to 11.2 percent).

Share of Measured Advertising Spending by Media:
Jan-Sep 2007 vs. Jan-Sep 2006

Measured Ad Spending by Advertiser
During the first nine months of 2007, the top 10 advertisers spent a combined total of $13.3 billion in measured media, a reduction of 2.3 percent from last year. The pace of spending for this select group picked up in the third quarter, advancing by 3.1 percent.

Extending outwards to the top 50 marketers, a more diversified group representing one-third of the measured ad economy, expenditures were down 2.2 percent year-to-date, to $34.3 billion. Outside the top 50, the segment which has been principally responsible for industry growth in recent years, spending rose 1.4 percent versus last year.

Procter & Gamble maintained its position as the largest advertiser with $2,466.5 million in spending, up 1.3 percent from last year. General Motors had the largest reduction among the top ten as its expenditures fell 18.0 percent to $1,425.8 billion. However, third quarter spending was up 2.0 percent versus last year, the first quarterly increase for the automaker in over two years.

Telecommunication companies kept their grip on three of the top ten spots. AT&T expenditures were off 5.1 percent to $1,663.4 million. The reductions were mostly in corporate promotion messaging as opposed to branded product campaigns. Higher spending behind core wireless businesses helped lift the total outlays at Verizon Communications (up 5.8 percent, to $1,514.1 million) and Sprint Nextel (up 12.4 percent, to $997.8 million).

On the other side of the ledger, top diversified media companies each trimmed their measured ad spending. At Time Warner, scaled-back marketing support for the America On Line ISP service more than offset increased budgets at the movie studios. Total expenditures contracted by 2.2 percent, to $1,197.9 million. Spending at Walt Disney fell by 6.0 percent, to $948.4 million and at News Corp. by 5.7 percent to $851.7 million on lower levels of advertising for their TV networks and motion picture releases.

Top Ten Advertisers: Jan-Sep 2007 vs. Jan-Sep 2006¹

Measured Ad Spending by Category
The top 10 advertising categories in the first nine months of 2007 spent $54.3 billion, up 0.6 percent from a year ago. In aggregate, they account for approximately one-half of all measured ad spending.

Financial Services maintained its top position with $6.7 billion in expenditures, up 5.5 percent for the nine month period. Despite the spreading turbulence in mortgage and banking markets that started in May, ad spending by mortgage lenders and retail banks continued to expand at double digit rates during the third quarter.

Direct Response had the largest percentage gain, up 15.1 percent to $5.4 billion. The category showed deep strength with higher ad spending levels across a broad range of brands. Personal Care Products gained 8.3 percent, paced by aggressive spending hikes from several top advertisers.

Total spending within the Telecommunications category fell 4.0 percent to $6.6 billion, dragged down by Vonage Holdings and the AOL division of Time Warner. The ongoing slump in automotive sales still extends to advertising budgets as well. Non-Domestic Auto dropped 6.1 percent to $5.9 billion and Domestic Auto shrunk 9.1 percent to $5.1 billion. Automotive advertising has now declined for nine consecutive quarters.

Outside the top categories, the impact of a cooling housing market was seen in lower rates of ad spending for Real Estate (off 13.9 percent to $2.1 billion) and Home/Building Retailers (down 1.9 percent to $3.5 billion).

Top Ten Advertising Categories: Jan-Sep 2007 vs. Jan-Sep 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 third quarter of 2007, an average hour of monitored prime time network programming contained eight minutes, 16 seconds (8:16) of in-show Brand Appearances and 15:15 of network commercial messages. The combined total of 23:31 of marketing content represents 39 percent of a prime-time hour.

Unscripted reality programming had an average of 9:41 per hour of Brand Appearances as compared to just 4:24 per hour for scripted programs such as sitcoms and dramas. Late night network talk shows had even higher levels, averaging 15:31 per hour. The combined load of Brand Appearances and network ad messages in these late night shows reached 30:34 per hour, or 51 percent of total content time.

Brand Appearances vs. Advertising: Q3 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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