TV Takes the Gold in Q3

Broadcast, cable budgets soar on infusion of Olympics, political dollars

Thanks in large part to an Olympian television marketplace and the deep pockets of Procter & Gamble and General Motors, U.S. advertising expenditures in the third quarter were up 7 percent versus the year-ago period.

According to an analysis by Kantar Media, the overall ad spend in Q3 added up to $34.5 billion, while spending for the first nine months of 2012 was up nearly 4 percent to $101.3 billion.

As expected, TV enjoyed the biggest portion of the ad bounty, which was inflated by spending on the 2012 London Summer Olympics and various political campaigns. All told, TV generated $18.3 billion in ad sales revenue, an improvement of 15 percent versus $15.9 billion a year ago.

Broadcasters took in $5.1 billion in sales, marking a 30 percent gain from $3.92 billion in Q3 2011. Naturally, a good deal of that extra volume was funneled toward NBC, thanks to its coverage of the Olympics. The Peacock scared up $1.2 billion in ad sales during the 17-day event.

National cable networks whipped up $5.9 billion in sales, up 3 percent from $5.73 billion, while spot TV booked $4.46 billion, a 20 percent hike.

Spanish-language broadcast and cable outlets grew ad sales 18 percent to $1.62 billion, and national syndication budgets were up 9 percent to 1.27 billion.

While the Olympics and politics delivered the expected jolt to the marketplace, accounting for some $1.8 billion in incremental spending, advertising on the whole has been relatively stable.

“Looking beyond these special events and focusing on indicators of core health, our data show that more than 60 percent of the top 1,000 advertisers increased their budgets year-over-year,” said Jon Swallen, chief research officer at Kantar Media North America. “This proportion has been stable for several quarters and indicates marketers are holding the course.”

Besides television, the only media to enjoy significant year-over-year growth were network radio (up 26 percent) and Spanish-language magazines (up 21 percent). Print platforms experienced slight contractions, as consumer magazines dipped 3 percent and b-to-b publications fell 4 percent.

National newspapers took the biggest hit, with budgets shrinking 17 percent, per Kantar data.  

Spending among the 10 largest advertisers in Q3 was $3.98 billion, an 8 percent increase compared to $3.67 billion a year ago. Among the Top 100 marketers, budgets rose nearly 12 percent.

Perennial big spender P&G was once again the top-ranked advertiser, with measured spending of $770.9 million in Q3, an increase of 5 percent. Fears of spending cuts at General Motors were unfounded, as the automaker invested $471.8 million in media, up 25 percent. Much of GM’s spend came out of its Cadillac division.

The largest growth rate among the top 10 was registered by Toyota, which ponied up $319.9 million, up 42 percent compared to a year ago, when operations were still hampered by the aftershocks of the Japanese tsunami and earthquake.

Warren Buffett’s Berkshire Hathaway cracked the upper echelon, thanks to a major sponsorship position in NBC’s Olympics coverage. The conglomerate laid out $347.2 million in media spend, up 27 percent versus Q3 2011.

It wasn’t all wine and roses, however. Ad expenditures for the two largest wireless service providers continued to decline, as AT&T investments fell 6 percent, to $384.3 million, while rival Verizon reduced its media budget by 12 percent, to $344.9 million.

Among all major categories, retail contributed the most to media’s strong quarter, with an overall outlay of $3.93 billion—up 8 percent from the prior-year period. Auto was No. 2 on the list, with manufacturer and dealer spend increasing 21 percent—far and away the largest increase among the top 10—to $3.82 billion.