Contrary to general opinion, the advertising market is thriving and the US economy is in better shape than many observers realise. This is according to the latest analysis from Jack Myers Report.
Myers asserts that advertising has traditionally lagged behind the economy by six to nine months. He uses the example of 2002 when advertising was rebounding at a time when the wider economy was considered to be in recession.
The media commentator claims that the ad market is currently in a period of ‘sustained upward momentum’ and reiterates that growth is set to continue into 2003 and throughout most of 2004 (see Current Ad Growth Bubble May Not Hold, Warns Myers). Myers takes comfort from the fact that every medium is experiencing growth, drawing particular attention to the fact that magazine pages were up by almost 2% in January. In addition, advertising companies are recruiting again and marketers appear confident of spending increases this year (see US Marketers Confident Of Increasing Budgets In 2003, Finds Myers).
Economic considerations On the wider front, fears of war and the depressed stock market appear to be clouding the fact that the US economy seems sound. Forecasters are predicting 3.5% growth this year and Myers cites falling unemployment and an increase in manufacturing as reasons for cheer. Moreover, retail sales hit a two-year high in January.
It is acknowledged that the Dow Jones cannot be ignored because company values give an indication of business conditions and growth prospects. However, recent investment scandals and the troubles of many corporations on Wall Street are by no means representative of the economy as a whole.
By the same token, a conflict in the Middle East could have an adverse effect on oil prices, spending and inflation but this is by no means certain and Myers has already ruminated that a short war could actually be beneficial to the advertising economy (see War May Not Hurt US Adspend In Short-Term, Claims Myers).
In light of these observations, Myers does accept that his forecasts of 2.8% adspend growth in 2003 and 4.1% in 2004 may err on the side of caution. However, he is of the opinion that recession is less than two years away and believes that the media sector should not get carried away with the expanding bubble. He implores the industry to “use this 18 to 24 month window for investment and preparation for the time when business is not as good as it is now.”
