Ad Spending

Are the woes of old media infecting the new? Shares of Yahoo Inc. fell 11% on Tuesday after the online giant said weaker ad sales would hurt its quarterly results. "Yahoo finds itself not immune to the forces of gravity," said Leland Westerfield of BMO Capital Markets. "The challenges buffeting traditional media apply equally to the online space." The Sunnyvale, Calif.

U.S. advertising spending grew more slowly than expected in the first quarter, hurt by cutbacks in the auto industry as it took steps to reverse huge losses, according to tracking firm TNS Media Intelligence. Ad spending rose 5.2% in the first three months of the year to $34.9 billion, trailing a forecast of 5.5% growth, according to TNS, which projects 5.4% growth for all of 2006. Spending by automakers and car dealerships account for more than 10% of U.S. ad revenue.

Newspapers saw increases in classified advertising as well as ads on their websites, according to preliminary estimates by the Newspaper Assn. of America. Ad spending for newspapers, including their websites, inched up 2.4% to $12 billion for the third quarter of 2005 when compared with the year-earlier quarter. Spending for print ads was up 1.6% to $11.4 billion compared with the third quarter of 2004. Classified ad spending was up 5.5%.

Advertising spending in 2004 rose 6.3% in the U.S. from a year earlier, led by syndicated and network television sales, Nielsen Media Research said. Syndicated TV ad sales rose 13.7%, the highest of any media, Nielsen said. Network TV and local magazines each rose 12.2%, followed by cable TV with an 11.7% increase.

The major presidential candidates, parties and interest groups are well on their way to surpassing $500 million in television advertising spending by election day -- smashing the record of four years ago -- as President Bush and Sen. John F. Kerry continue to tear into each other on the airwaves in 14 states, an independent report showed Monday. In hot spots like Tampa, Fla., Cleveland and Philadelphia, hundreds of campaign ads are pelting TV viewers every day.

Biting political commercials surfaced in several electoral hot spots Friday, as the two sides in the presidential race traded charges on a variety of fronts. In one ad, President Bush said Sen. John F. Kerry would raise taxes on business. In another, Kerry slammed Vice President Dick Cheney's ties to a controversial defense contractor. And various other ads sniped at Bush or Kerry on such matters as Vietnam War protests, healthcare costs and the rising death toll in Iraq.

In the first full week after the Republican convention, President Bush blitzed 17 states with television commercials in an effort to capitalize on his momentum in battlegrounds from coast to coast. At the same time, Sen. John F. Kerry spent his TV dollars in a much narrower pool of eight crucial states. Democratic allies, meanwhile, sought to keep Kerry's chances alive in Arizona, Colorado and Missouri with advertisements in those Bush-leaning states.

The Republican National Convention is essentially a four-day commercial for President Bush's reelection, but an array of conservative, liberal and partisan groups also are vying for television viewers with a wave of advertisements in New York and elsewhere. On Monday, the Log Cabin Republicans, a gay activist group, launched a 30-second spot on cable channels in New York and nationally to protest a party platform it considered intolerant toward gay and lesbian concerns.

Although Sen. John F. Kerry has essentially stopped advertising, the Democratic National Committee and like-minded organizations kept the presidential candidate's mess- age on television in battleground states and spent more than twice as much as the Bush campaign during the first week of August. President Bush surged back to the airwaves after the Democratic National Convention, spending nearly $4.

The Democratic Party is preparing to spend at least $6 million on television commercials starting this weekend, sources said, a crucial boost to presidential nominee John F. Kerry as he suspends his own TV advertising next month to hoard cash for the fall. The advertisements, targeting more than a dozen competitive states, will be the Democratic National Committee's first foray into a fierce general-election battle zone.