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Ad Spend to Grow 3% in '07, 7% in '08

Ad Spend to Grow 3% in '07, 7% in '08

Combined, 18 media categories - comprising both traditional and nontraditional - are projected to increase 3.1 percent in 2007, down from Myers's original forecast of 3.7 percent (issued in December), according to Jack Myers Media Business Report, writes MarketingCharts.

Myers also forecasts that overall media advertising will increase 6.9 percent in 2008 and 3.1 percent in 2009.

"Reports from other forecasters suggesting the US ad industry may be entering a recessionary period are grossly misleading because they focus exclusively on traditional media such as television, newspapers and radio and fail to pick up on the shift of marketers' budgets to untracked categories," said Myers.

Nontraditional media grew nearly 23 percent in 2006, accounting for $25.2 billion in spend, or 11.3 percent of total 2006 ad expenditures of almost $223.8 billion, according to Myers.

Nontraditional - cinema, mobile, videogame, branded entertainment, satellite radio and custom publishing advertising - is projected to grow 20.3 percent in 2007, 18.4 percent in 2008 and 18.5 percent in 2009.

However,12 traditional media categories, including yellow pages and online, are projected to grow less than 1 percent in 2007 but driven by political ad spend will jump 5.2 percent in 2008 then level off in 2009 with just 0.4 percent growth, Myers forecast.

Excluding online advertising, however, would result in a revenue decrease of 0.6 percent in 2007 for traditional media, and a 2.6 percent decrease in 2009.

Other data from the Jack Myers forecast:

* Internet advertising, including search and video, is projected to increase 20 percent to $16.7 billion in 2007, 24 percent in 2008 and 28.5 percent in 2009.

* Broadcast network TV will increase 2.0 percent in 2007 and 3.2 percent in 2008, but will adjust downward in 2009, losing 4.0 percent.

* Local and national spot TV, the greatest beneficiary of political spending, is forecast to gain 13.5 percent in 2008 after declines of 6.0 percent in 2007.

* Terrestrial radio is expected to decline 2.0 percent in 2007 and rebound with 2.5 percent growth in 2008 before declining 4.0 percent in 2009.

* The largest declines in ad spending will be suffered by newspapers, which will lose 4.6 percent in ad revenues in 2007, 2.4 percent in 2008 and 4.5 percent in 2009.

* Total direct marketing, promotion and advertising budgets are forecast to grow 3.6 percent in 2007. Total marketing communications investment growth will slump in 2009, however, to only 0.3 percent, with media advertising gaining 3.1 percent.

* Myers projects robust annual growth of 15 percent in 2007 and 2008 for event marketing.


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