Myers Is Positive Over US Adspend, 2.8% 2003 Growth Predicted

“Strong performance in virtually all media sectors, especially driven by continued growth of electronic media and a second-half resurgence of print media, has resulted in extraordinary performance for media in 2002 and very positive indications for 2003,” says Myers.

JMR is forecasting 2003 growth of 2.8%, discounting direct marketing revenue. These figures are an upgrade of predictions made in October, which put 2002 growth at 1.0%, 2003 at 2.3% and 2004 at 4.6% (see US Advertising Forecasts From Jack Myers Report).

Jack Myers Report US Advertising Forecasts
	2002			2003
	Growth (%)	$ million	Share (%)	Growth (%)	$ million	Share (%)
Newspapers	-1.0	43,857	27.3	1.0	44,296	26.8
Broadcast Networks	6.0	15,985	9.9	5.0	16,784	10.1
Loc & Nat Spot TV	7.0	20,410	12.7	3.0	21,023	12.7
Broadcast Syndication	5.0	2,693	1.7	4.0	2,801	1.7
Radio	4.5	19,228	12.0	3.0	19,805	12.0
Yellow Pages	3.0	13,977	8.7	1.0	14,117	8.5
Magazines	1.5	16,456	10.2	2.5	16,868	10.2
Network Cable TV	2.0	12,500	7.8	8.0	13,500	8.2
Loc/Reg Cable TV	12.5	4,100	2.5	15.0	4,715	2.9
Online	9.4	3,500	2.2	14.3	4,000	2.4
Online Non-Trad. Marketing	-25.0	3,000	1.9	-25.0	2,250	1.4
Outdoor	1.0	5,186	3.2	1.0	5,238	3.2
Total	2.5	160,893	100.0	2.8	165,396	100.0
Source: Jack Myers Report, December 2002

Unexpected turnaround for press Myers says that perhaps the biggest surprise is the reversal of what has been a sustained downturn in revenue for newspapers and consumer magazines. Early 2002 indications were that spending in both media would decline in the mid-single digit range.

However, beginning in the second quarter, these media began experiencing renewed advertiser interest. By Q3, it appeared that newspapers and magazines were generating unexpected revenue growth of 5% and more on a month-to-month basis, offsetting negative Q1 figures, says the report.

Most forecasters expected that the upturn reflected short-term promotional spending from categories such as automotive, pharmaceutical, fashion and retail, claims Myers. However, growth rates actually accelerated in Q4, assuring significantly stronger overall revenues than expected.

“A similar pattern emerged in local television and radio, where increased spending by auto dealer groups, political campaigns, wireless telecommunications and retailers were expected to be strong in the fourth quarter. However, local radio and television stations were surprised by strong demand that began last April and has continued to exceed expectations throughout the fourth quarter,” says Myers.

Broadcast networks hit a growth rate of 6% in 2002, following a 5% decline in 2001. A strong Q3 and Q4 scatter market, combined with lower than usual cancellations (see More Confidence Seen In US Advertisers By Merrill Lynch), resulted in the networks’ cautiously optimistic goals being achieved.

Strong H1 2003 is assured The report claims that a strong H1 for US advertising-dependent media companies is now virtually assured.

“Based on the strong broadcast network upfront market, growth in broadcast and cable network spending can be reliably forecast through the first three quarters. Cable television networks experienced declines of 2% in first half 2002 spending, but reversed the trend in the second half and had an especially strong Q4. These high single-digit growth rates will continue throughout most, if not all, of 2003.”

For 2004, Myers anticipates another strong growth year and is forecasting 4.1% growth rates, with especially strong performance in local electronic media and sustained recovery for newspapers and magazines.

Marketers reluctant to decrease adspend Myers also says that marketers are now very reluctant to decrease ad spending levels for fear of losing market share, adding that they continue to concentrate the bulk of their budgets in the traditional media of television, newspapers, radio and magazines.