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TNS Media Intelligence Forecasts 2.6 Percent
Increase in U.S. Advertising Spending for 2007

Internet to Continue Double Digit Growth, with Syndicated TV, Outdoor and Magazines Higher Than Market Average

Total U.S. advertising spending is expected to increase 2.6 percent in 2007 to $153.7 billion, according to the full-year forecast released by TNS Media Intelligence, the leading provider of strategic advertising and marketing information. This anticipated tepid gain is the smallest since the media economy emerged from its 2001 recession and follows estimated advertising spending growth of 3.8 percent in 2006.

Advertising expenditures are forecast to increase by just 2.1 percent in the first half of 2007 followed by a gain of 3.2 percent in the second half, paralleling an expected late year uptick in overall economic activity.

Our outlook for 2007 is tempered by the absence of two biennial advertising events, the Olympics and federal elections, which tend to contribute an incremental 80-100 basis points to growth rates, said Steven Fredericks, President and Chief Executive Officer, TNS Media Intelligence. More significant, we expect share of total ad spending will continue to shift away from the Top 100 marketers, as media fragmentation enables more brands with smaller media budgets to participate in the market, while concurrently helping dampen media price inflation.

 

2007 TOTAL AD EXPENDITURES1

GROWTH ESTIMATES

   
PERIOD % CHANGE vs. 2006
First Half 2007 2.1%
Second Half 2007 3.2%
FULL YEAR 2007 2.6%

Source: TNS Media Intelligence

1 Defined as all TNS MI measured media, including: Network TV; Spot TV; Cable TV; Syndication TV; Hispanic Network TV; Consumer Magazines; Sunday Magazines; Local Magazines; Hispanic Magazines; Business-to-Business Magazines; Local Newspapers; National Newspapers; Hispanic Newspapers; Network Radio; Spot Radio; Local Radio; Internet; and Outdoor.

Based on our forecast, 2007 is poised to be the third consecutive year in which the advertising sector more closely tracks growth in real GDP as opposed to its historical reference mark of nominal GDP, added Fredericks. The forces driving this new pattern appear to be sustaining and there is little reason to believe a return to the old order will be forthcoming.

 
ANNUAL GROWTH RATES
  AD SPEND REAL GDP
2000  +13.3% +3.7%
2001  (-9.8%) +0.8%
2002  +4.2% +1.6%
2003  +6.1% +2.5%
2004  +9.8% +3.9%
     
2005  +3.0% +3.2%
2006  +3.8% (e) +3.0% (e)
2007  +2.6% (e) +2.2% (e)
Sources: TNS Media Intelligence; Bureau of Economic Analysis; UBS Warburg

Internet display advertising is expected to continue growing at double-digit rates in 2007 with Syndication TV, Outdoor and Magazines also exceeding the overall market average. Network TV is projected to be almost flat versus 2006, while newspapers and Spot TV are expected to experience outright declines in ad revenue.

 
2007 PROJECTIONS BY MEDIUM

(Ranked by Growth Rate)

      % SHARE OF AD SPEND
  % CHANGE vs. 2006   2007

(forecast)

2006 (estimate)

Internet1

13.4%   7.2% 6.5%
Syndication TV 6.6%   2.9% 2.8%
Outdoor 5.7%   2.6% 2.5%
Consumer & Sunday Magazines 5.5%   17.9% 17.5%
Spanish Language Media 5.4%   3.3% 3.2%
Cable Network TV 4.7%   11.9% 11.7%
Business-To-Business Magazines 2.1%   3.0% 3.0%
Radio 1.7%   7.3% 7.4%
Network Television 0.6%   15.2% 15.5%

Newspapers2

-0.9%   17.7% 18.4%
Spot TV -2.8%   10.9% 11.6%

Source: TNS Media Intelligence

1. Internet estimates reflect display advertising only

2. Newspaper estimates do not include web site advertising

Share figures may not add to 100.0% due to rounding


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