Analysts, Agencies Predict Moderate Ad Sales Growth For 2007
December 5, 2006 at 12:24 PM (PT)
Analysts and agencies began to release their annual revised advertising market forecasts MONDAY, and most of the early predictions peg 2007 ad-sales growth in the 2%-5% range.
Among the predictors was UNIVERSAL MCCANN's BOB COEN, who told the UBS media conference that ad revenue will rise 4.8% overall to $298.77 billion, slightly off from 2006's revised 5.2% prediction due to political ad sales for 2006. COEN sees national TV ad spending rising 6%, with magazines up 5% and newspapers up 1%. Radio, he said, will grow 1% in 2007 (national up 4%, local up 1%) after being down 1% in 2006. The biggest problem for media is local ad spending, which he said "is really pulling things down," citing 2006's consolidation of department store chains (like the MACY'S rebranding and closing of several regional chains) and pharmacy chains.
...a boom in Internet spending, with that market jumping 28.2% and the rest of the ad market up 3.9%...
Meanwhile, at the same conference, ZENITH OPTIMEDIA's STEVE KING is looking at a boom in Internet spending, with that market jumping 28.2% and the rest of the ad market up 3.9%, vaulting online ads over outdoor advertising into fifth among all media and pushing radio into fourth within three years. KING expects radio's share of overall advertising to shrink slightly, to 8%, this year.
LEHMAN BROS.' ad-spending predictions are for a 3.3% increase in 2007, with radio declining 1% year-to-year. The analysts see national (4.9% growth) outpacing local (1.1% growth) in overall ad spending.
Finally, the latest TNS MEDIA INTELLIGENCE report shows the overall American ad market growing 4% to $108.4 billion in the first nine months of 2006, but radio is showing a 1.1% decline to $8.091 billion. Local radio dropped 1.5% to $5.454 billion, with national spot radio up 0.5% to $1.918 billion, and network radio down 1.7% to $719.1 million.
"Although total ad spending has turned in a modest year-to-date gain, growth rates over the past six months lag forecast projections by 80-90 basis points," TNS Pres./CEO STEVEN FREDERICKS said, adding that "record-setting levels of political advertising, which will also impact fourth-quarter figures, have not been enough to overcome continued weakness within the automotive, retail and travel sectors."