Ad Revenue Isn't Shrinking. It's Changing.

If you're interested in a post-mortem of 2007's declining advertising dollars scroll down and start reading at "autopsy."

The depressing figures from TNS Media Intelligence and Nielsen Monitor-Plus aren't the trusty economic indicator they once were.

The decline they appear to show is probably less about slowing industry growth than it is about marketers dishing out dollars on media that aren't included in the tallies, like search advertising and pre-rolls, those pesky commercials that pop up before the web video you meant to watch.

There's more to the reports on advertising spending than meets the usual headlines, and this time it has to do with Tivo. Brands are sneaking into your TV time and you can't Tivo past them.

In the second quarter of 2007, about 8 minutes of an average hour of primetime broadcast network programming depicted brands. That's up from a bit less than 3 minutes of in-show brand messaging in the second quarter of 2006. That translates into an increase of 183 percent.

Scripted shows, rather than reality programming, got the biggest boost. Brand appearances in scripted primetime shows were up 231 percent, or from less than two minutes per hour to more than five minutes per hour.

Nielsen's measurements echo the increase. In the first half of 2007, there were 17,371 instances of product placement during the Top 10 broadcast network primetime shows. Compare that to 14,643 instances for the same time period in 2006. It's an increase of 21 percent.

Jon Swallen, vice president for research at TNS, said the results were goosed a bit by a unusually large number of product placements in a relatively small number of shows.

"For example, Drive on Fox had an enormous volume of automotive appearances because the program was about a cross-country auto race," he said in an email interview. "HP Computers logged a lot of on-screen time in The Office, .... but they're props for verisimilitude, not for plot integration."

In any case, neither Nielsen or TNS measure how much money marketers spend on product placement. Therefore, that amount is also not included in the total figures.

Autopsy.

While General Motors isn't to blame for the whole decrease, you could point a finger at them. Media lost $321.5 million from G.M. when you compare its spending in the first half of 2007 to the first half of 2006, according to TNS. In 2006 G.M. spent $713 million less than in 2005.

"While the protracted downturn in automotive spending has been a prime contributor, the overall results reflect weakness across a wide range of industries and advertisers," said Steven Fredericks, president and C.E.O. of TNS Media Intelligence.

According to Nielsen, advertising spending for the first half of 2007 was down 0.5 percent to $65.8 billion over the same period last year.

The biggest winner percentage-wise? Internet spending. It was up 23.2 percent.

Biggest loser? Network radio down 8.5 percent.

TNS isn't far from Nielsen's measurement. It says advertising spending for the first half of 2007 was down 0.3 percent to $72.6 billion when compared with the same period in 2006.

Biggest winner? No surprise: the Internet, but with an increase of 17.7 percent in spending.

Biggest loser? Trade magazines.

by Willow Duttge