US Adspend To Grow

Conversely, 12 traditional media including yellow pages and online will increase less than 1% in 2007 but will rebound in 2008 with 5.2% growth (driven heavily by political advertising) before softening again in 2009 with only 0.4% growth.

Excluding online advertising results in a revenue loss of 0.6% in 2007 for traditional media and a loss of 2.6% in 2009. Further eliminating out-of-home and place-based media, which are experiencing solid annual growth, translates into spending declines for 10 traditional media of 0.9% in 2007 and 3% in 2009. 2008 spending increases 3.3%.

Combined, the 18 media categories are projected to increase 3.1% in 2007, down from Myers’ original forecast, issued last December, of 3.7%. Myers forecasts that overall media advertising will increase 6.9% in 2008 and 3.1% in 2009.

Jack Myers , president of Myers Publishing, said: “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.”

Total direct marketing, promotion and advertising budgets will grow an estimated 3.6 percent in 2007. Total marketing communications investment growth will slump in 2009, however, to only 0.3%, with media advertising gaining 3.1%. The greatest year-to-year marketing decreases are in the nebulous “other” category, which includes local sponsorships, charitable contributions, and executives’ discretionary budgets.

Internet advertising, including search and video, is projected to increase 20% to $16.7 billion this year, with 24% gains in 2008 and 28.5% growth in 2009, Myers forecasts. The increased growth will result from a shift of advertisers’ budgets from television to online video, although networks will be a primary beneficiary of these dollars.

A recent forecast from Veronis Suhler Stevenson predicted that US online adspend will reach $61.98 billion, surpassing newspapers to become the leading US ad medium in 2011 (see US Online Adspend To Reach $61.98bn).

Meanwhile, a report from TNS Media Intelligence revealed that total US advertising expenditures in the first half of 2007 slipped by 0.3% to $72.59 billion versus the same period in 2006 (see US Adspend Slips 0.3%).