Merrill Lynch has revised its 2005 US advertising spend forecast downwards to 4.8%, compared to its November prediction of 5.2%.
While political spending in 2004 will have certainly created difficult comparisons for 2005, Merrill Lynch believes the slower growth anticipated for next year is only in part due to this. The research group estimates that the Olympics and the US presidential elections will have contributed just 0.5% to the overall growth in 2004.
Merrill’s overall revision for 2005 is largely based on multiple changes by medium. The newspaper market has been revised downwards to 3.9%, from 5.1% previously, over concerns that the ad rate realisation will be weaker than originally thought owing to declining circulation volume and impact from the growth of lower-rated on-line classified advertising.
For TV broadcast networks, the absence of the Olympics has led Merrill Lynch to reduce its forecast to a flat 0%, from the 3% growth predicted last month.
Magazines is forecast to maintain its 5% growth, while the internet is still predicted to achieve a growth of 19% in 2005.
These forecasts differ starkly to those of the two industry prognosticators, Universal McCann and ZenithOptimedia, both of whom released 2005 ad spend predictions earlier this month.
Merrill Lynch’s 4.8% growth for 2005 is behind Universal McCann’s 6.4% forecast (see Universal McCann Predicts Positive Outlook For 2005)but is somewhat ahead of ZenithOptimedia’s 4.2% estimate(see 2004 Predicted To Be Exceptional Year For Advertising).
Globally, Merrill Lynch predicts a growth of 4.5% for 2005, a figure below both ZenithOptimedia’s 5.0% forecast and Universal McCann’s 6.1% projection.
| MERRILL LYNCH ADVERTISING FORECASTS |
|
| |
2001 |
2002 |
2003 |
2004F |
2005F |
| Total US |
-6.3 |
2.1 |
3.8 |
6.7 |
4.8 |
| Total US exc. direct mail |
-7.8 |
1.9 |
3.5 |
6.8 |
4.6 |
| Newspaper |
-9.4 |
0.4 |
2.6 |
4.8 |
3.9 |
| Broadcast television |
-13.2 |
8.2 |
-0.3 |
8.9 |
-0.5 |
| TV networks |
-10.0 |
4.9 |
0.2 |
8.5 |
0.1 |
| TV stations |
-16.8 |
11.9 |
-2.4 |
8.3 |
-1.0 |
| Cable |
1.8 |
3.6 |
15.4 |
12.7 |
12.0 |
| Radio |
-7.5 |
5.7 |
1.1 |
1.8 |
3.5 |
| Magazine |
-7.5 |
-3.5 |
3.0 |
6.0 |
5.0 |
| Internet |
-11.8 |
-20.8 |
16.9 |
31.1 |
19.4 |
| Non-US |
-8.6 |
0.5 |
1.4 |
4.6 |
4.5 |
| Global |
-8.2 |
1.2 |
2.4 |
5.7 |
4.5 |
| Source: Merrill Lynch, December 2004 |
|
