A few days ago, TNS Media Intelligence released their ad media spending report for the first quarter of 2006. Their overall conclusion: ad expenditures in the US increased about 5.2% over the same period of time last year. Leading the pack was Internet advertising, which, though only accounting for about 1/3 as many dollars as network TV spending, grew a dramatic 19.4%. I originally came across this article because the OAAA, the preeminent source of information on the outdoor advertising industry, put out a press release noting that outdoor ad spending was also up a healthy amount: 11.1% over 1st quarter of '05. Since outdoor advertising trends have been something of an indicator of digital signage trends recently (and I make that statement only on the basis of our own internal research, nothing "official"), this caught my eye as something fairly important. Continuing through both the TNS and OAAA releases, there are certainly some interesting clues that the ad industry is continuing to explore heretofore less frequently tapped media and techniques.
First of all, while the TV ad folks have been grumbling for a while about the challenges of selling in today's market, the numbers for network, spot and cable TV ad spending are all up - a whopping 12.3% in the case of network TV. Other big gainers included the aforementioned Internet sector, FSIs (at 18.5%), and magazines (at over 10% on average). Spanish-language media spending was also way up, and while it's nice to be able to track that demographic so carefully, TNS's methodology of lumping Spanish-language TV, newspaper and magazine advertising together makes any kind of analysis of this stat pretty hard.
More telling than the metrics about individual media, though, are TNS's numbers on the biggest individual advertisers and industry categories. P&G (of first-moment-of-truth fame) is holding on to the top spot for advertisers, having spent over $790M on advertising in the first quarter. That's up almost 14% from last year. However, they're the only CPG company to make it into the top 10. Telecom makes a strong showing here, with both AT&T and Verizon showing substantial increases in ad spending from last year. In fact, as a category telecom posted the biggest numbers both in terms of overall ad spending ($2.31B) and percent growth over '05 (20.4%). Meanwhile, the three categories most relevant to my business showed mixed results: while local services and amusements and personal care products were both up (15.7% and 6.9% respectively), miscellaneous retail was down 3.7%.
Mediaweek tell us that based on these numbers, out-of-home ad spending was up about 8%, outpacing the industry average of 5.2%. Notably, "in addition to attracting new advertisers, as many as 20 national brands increased their out-of-home spending by more than 50 percent." So far, what little measurement has been done on in-store media networks has been included in the out-of-home category, so it's good to see continued growth (and presumably positive results) in this study.
In summary, while I don't think that ad spending on digital signs and kiosks is going to increase to the point where it will be broken out into its own category anytime soon, I am encouraged by not only the growth of the industry (in terms of both size and speed), but also by the sophistication that it seems to be developing. Perhaps the best example of this trend, at least for the retail sector, is Wal-Mart's recent claim that in-store media is the most important content delivery channel. Granted, there doesn't seem to be any slowdown in the sheer number of companies still trying to enter the place-based media space (and honestly, there are way more than enough already), but you can really start to see a lot of providers pitching solutions geared towards savvy media planners, buyers and agencies, and new services continue to pop up to give digital signage real, tangible advantages over the other media out there. It's this sophistication that continues to lead me to believe that out-of-home will be the next great media consumption venue, with digital signs and interactive kiosks -- in whatever form they might take -- serving as the key delivery mechanisms.