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US Outdoor Advertising Expected To Overtake Radio By 2005

US Outdoor Advertising Expected To Overtake Radio By 2005

Outdoor advertising is expected to grow faster than radio in the US over the next 5 years, according to a new report from Merrill Lynch.

The global advisory company says that US outdoor advertising is undergoing positive secular changes allowing it to transform into a growth sector while radio migrates from a growth to mature industry.

Recently, the Outdoor Advertising Association of America announced that quarter one 2004 domestic outdoor advertising revenue rose by 5% year on year, following a 5.7% growth in quarter four 2003 and 5.2% for the whole year of 2003. This growth surpassed quarter one 2004 radio revenue which grew by only 4%.

Merrill Lynch believes that if growth like this continues, outdoor advertising could become the last truly mass medium and could increase its current share of total advertising budgets from 2% up to 4%.

After a slightly better than expected result from May US newspaper advertising revenues, which grew by over 5%, a separate report from Merrill Lynch indicated that its 2004 forecast for this sector has increased to 5.5%, up from 4.5%.

The report says that a number of US advertising sectors, including newspapers and radio are not behaving as expected. However, as forecast, the internet is booming, while recent information about the TV upfront market would suggest that network TV is losing share to cable networks.

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