Myers Upgrades Longterm Advertising Forecasts
The tragic events of 11 September in the US may not have the long-term negative effects on the media and advertising industries that many had first suspected.
Most US business categories are refocusing their marketing strategies away from long-term brand building, moving away from advertising and investing more in short term promotional and direct marketing investments, says Myers. However, as conditions in the US stabilise, marketers will have to return to brand advertising to protect their franchises and build market share as consumers cut back on their spending, he warns.
Myers has now reassessed his advertising growth forecasts, painting a more positive outlook for the longer term. Whilst 2001 and 2002 are now expected to perform more poorly than had previously been anticipated (at -6.6% and -7.4% respectively), the following years have been upgraded.
US Ad Revenue Growth Forecasts Revisions | |||
ÂÂ | Original Myers Projections (14/08/01) | New Myers projections (03/10/01) | % Point Change |
2000 | 8.3 | 8.3 | 0.0 |
2001 | -4.0 | -6.6 | -2.6 |
2002 | -1.7 | -7.4 | -5.7 |
2003 | 0.0 | 0.9 | 0.9 |
2004 | 2.7 | 3.0 | 0.3 |
2005 | 0.9 | 1.6 | 0.7 |
2006 | 1.0 | 3.0 | 2.0 |
ÂÂ | ÂÂ | ÂÂ | ÂÂ |
Source: Jack Myers Report, 03/10/01 |
Whilst the long-term outlook is positive according Myers, he warns media buyers and sellers should nevertheless prepare themselves for advertising to decline ‘precipitously’ in the next twelve months as a result of market uncertainties.
Media Revenues & Market Share Redistribution | ||||
ÂÂ | 1998 Revenues ($m) | Share | 2006 Revenues ($m) | Share |
Newspapers | 44,300 | 25.5 | 45,558 | 23.6 |
Bcst Networks | 14,297 | 8.2 | 15,027 | 7.8 |
Natl Spot TV | 10,659 | 6.1 | 8.401 | 4.4 |
Bcst Syndic. | 2,609 | 1.5 | 2,478 | 1.3 |
Local Bcst TV | 12,169 | 7.1 | 10,965 | 5.7 |
Radio | 14,950 | 8.6 | 18,050 | 9.4 |
Yellow Pages | 12,100 | 7.0 | 11,315 | 5.9 |
Magazines | 10,400 | 6.0 | 17,358 | 9.0 |
Network Cable | 6,560 | 3.8 | 12,366 | 6.4 |
Local Cable TV | 2,520 | 1.5 | 7,446 | 3.9 |
Online | 1,500 | 0.9 | 9,921 | 5.1 |
Out-of-Home | 4,675 | 2.7 | 5,278 | 2.7 |
Other | 36,925 | 21.4 | 28,763 | 14.8 |
TOTAL | 173,664 | 100.0 | 192,924 | 100.0 |
Source: Jack Myers Report, 03/10/01 |
Myers says that it is important to recognise that total US adspend in 1998 was $173 billion and that in 2002 – even on worse case scenario figures – it will be $177 billion. Even with compound declines of 6.6% in 2001 and 7.4% in 2002, growth in 1999 and 2000 was so great that the industry will be able to maintain its strength and viability, according to the report. The sheer strength of the 1999 and 2000 markets also means that comparables are inevitably going to look bleak.
Annual Growth Rates In Advertising Revenues For Major Media | |||||||
ÂÂ | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 |
Newspapers | 3.1 | -2.0 | -2.0 | -1.0 | 0.0 | 0.0 | -1.0 |
Bcst Networks | 10.2 | -6.0 | -9.0 | 0.0 | 1.5 | 0.0 | 2.0 |
Natl Spot TV | 16.8 | -20.0 | -9.0 | -2.0 | 1.0 | -3.0 | -2.0 |
Bcst Syndic. | 9.0 | -16.0 | -12.0 | 2.0 | 3.0 | 0.0 | 2.0 |
Local Bcst TV | 6.8 | -10.0 | -10.0 | 0.0 | 2.0 | -2.0 | 0.0 |
Radio | 14.0 | -8.0 | -5.0 | 1.0 | 4.0 | 0.0 | 3.0 |
Yellow Pages | 2.0 | -4.0 | -2.0 | -1.0 | -1.0 | -1.5 | -2.0 |
Magazines | 15.0 | -4.5 | -9.0 | 3.0 | 2.5 | 2.0 | 4.0 |
Network Cable | 22.0 | -2.0 | -8.0 | 8.5 | 10.0 | 7.0 | 10.0 |
Local Cable TV | 16.0 | 10.0 | 5.0 | 15.0 | 16.0 | 15.0 | 15.0 |
Online | 79.2 | 10.0 | 12.0 | 15.0 | 20.0 | 15.0 | 18.0 |
Out-of-Home | 8.3 | -1.0 | -1.0 | 0.0 | 2.0 | 1.0 | 1.0 |
Other | 1.0 | -13.0 | -20.0 | -2.0 | 3.0 | 2.0 | 5.0 |
TOTAL | 8.3 | -6.6 | -7.4 | 0.9 | 3.0 | 1.6 | 3.0 |
Source: Jack Myers Report, 03/10/01 |