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Third-quarter ad spending up 7%, boosted by politics and Olympics

December 17, 2012|By Meg James
  • The NBC network and its sister cable channels took in an estimated $1 billion from advertisers during the London Olympics. Above, the closing ceremony.
The NBC network and its sister cable channels took in an estimated $1 billion… (Wally Skalij / Los Angeles…)

The London Olympics and political campaigns pumped nearly $2 billion into the U.S. advertising market during the third quarter of 2012, according to consulting firm Kantar Media. 

"Political campaigns and the Summer Olympics delivered their expected bonanza in the third quarter, adding roughly $1.8 billion of incremental spending to the marketplace," Jon Swallen, Kantar Media North America's chief research officer, said in a statement.

Third-quarter advertising expenditures of $34.5 billion represented a 7.1% jump from a year earlier, Kantar reported. Total ad spending for the first nine months of the year topped $101 billion -- an increase of 3.8%.

The largest beneficiary of the increased spending during the quarter was NBC, which broadcast the London Olympics. Spending on network television increased nearly 30%, and Kantar estimated that the NBC network and its sister cable channels took in $1 billion from advertisers eager to tout their products during the 17-day event in July and August.

High ratings allowed NBCUniversal to break even on its coverage of the Games, rather than post a deficit as the company earlier feared.

Local television stations were awash in political dollars, helping  total ad revenue soar nearly 20% over the third quarter of 2011. 

Spanish-language television also shared in the bounty, with their ad dollars increasing 17.8% in the three-month period.  Recognizing the importance of Latino voters, political campaigns steered more money to the Spanish-language outlets.

Cable television advertising grew nearly 3%. Some cable networks took a hit because advertisers shifted their spending to outlets that televised the Olympics. Syndicated shows experienced a 9.3% bump in spending.

Spending for ads in local newspapers was flat while national newspapers suffered a 17.2% decline for the quarter. Internet display ads declined 4.3%, but that is not representative of all digital advertising because it does not include video or mobile ad formats.

Advertising for retail outlets reached $3.9 billion -- an 8% increase.  Automotive advertising was the second-largest category, at $3.8 billion, which represented a 20% increase.  Telecommunications and restaurants also increased their ad budgets. Spending by banks and other financial services, including credit card firms, slipped 2.3% to nearly $1.9 billion.

The top advertisers were consumer products giant Procter & Gamble Co., which spent more than $770 million in the quarter, and General Motors Co., which spent nearly $472 million. 

Comcast Corp., which controls NBCUniversal, was the third-biggest spender, at $418 million, up nearly 6%, with much of the money going toward marketing its cable TV and broadband services.

AT&T Inc. spent $384 million in the third quarter while Warren Buffett's Berkshire Hathaway, which was a major sponsor of the Olympics, was the fifth-most prolific, doling out $347 million. 

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