Myers Upgrades Longterm Advertising Forecasts

According to Jack Myers Report today, the cost-cutting measures which many companies have set in place in recent weeks may have been necessary even before the terrorist attacks. However, companies would have previously been very reluctant to instigate such measures as it would have sent the wrong message to the markets and investors. As Myers now says: “After September 11, perceptions clearly changed.”

Most US business categories are refocusing their marketing strategies away from long-term brand building, moving away from advertising and investing more in short term promotional and direct marketing investments, says Myers. However, as conditions in the US stabilise, marketers will have to return to brand advertising to protect their franchises and build market share as consumers cut back on their spending, he warns.

Myers has now reassessed his advertising growth forecasts, painting a more positive outlook for the longer term. Whilst 2001 and 2002 are now expected to perform more poorly than had previously been anticipated (at -6.6% and -7.4% respectively), the following years have been upgraded.

US Ad Revenue Growth Forecasts Revisions
ÂÂ	Original Myers Projections (14/08/01)	New Myers projections (03/10/01)	% Point Change
2000	8.3	8.3	0.0
2001	-4.0	-6.6	-2.6
2002	-1.7	-7.4	-5.7
2003	0.0	0.9	0.9
2004	2.7	3.0	0.3
2005	0.9	1.6	0.7
2006	1.0	3.0	2.0
ÂÂ	ÂÂ	ÂÂ	ÂÂ
Source: Jack Myers Report, 03/10/01

Whilst the long-term outlook is positive according Myers, he warns media buyers and sellers should nevertheless prepare themselves for advertising to decline ‘precipitously’ in the next twelve months as a result of market uncertainties.

Media Revenues & Market Share Redistribution
ÂÂ	1998 Revenues ($m)	Share	2006 Revenues ($m)	Share
Newspapers	44,300	25.5	45,558	23.6
Bcst Networks	14,297	8.2	15,027	7.8
Natl Spot TV	10,659	6.1	8.401	4.4
Bcst Syndic.	2,609	1.5	2,478	1.3
Local Bcst TV	12,169	7.1	10,965	5.7
Radio	14,950	8.6	18,050	9.4
Yellow Pages	12,100	7.0	11,315	5.9
Magazines	10,400	6.0	17,358	9.0
Network Cable	6,560	3.8	12,366	6.4
Local Cable TV	2,520	1.5	7,446	3.9
Online	1,500	0.9	9,921	5.1
Out-of-Home	4,675	2.7	5,278	2.7
Other	36,925	21.4	28,763	14.8
TOTAL	173,664	100.0	192,924	100.0
Source: Jack Myers Report, 03/10/01

Myers says that it is important to recognise that total US adspend in 1998 was $173 billion and that in 2002 – even on worse case scenario figures – it will be $177 billion. Even with compound declines of 6.6% in 2001 and 7.4% in 2002, growth in 1999 and 2000 was so great that the industry will be able to maintain its strength and viability, according to the report. The sheer strength of the 1999 and 2000 markets also means that comparables are inevitably going to look bleak.

Annual Growth Rates In Advertising Revenues For Major Media
ÂÂ	2000	2001	2002	2003	2004	2005	2006
Newspapers	3.1	-2.0	-2.0	-1.0	0.0	0.0	-1.0
Bcst Networks	10.2	-6.0	-9.0	0.0	1.5	0.0	2.0
Natl Spot TV	16.8	-20.0	-9.0	-2.0	1.0	-3.0	-2.0
Bcst Syndic.	9.0	-16.0	-12.0	2.0	3.0	0.0	2.0
Local Bcst TV	6.8	-10.0	-10.0	0.0	2.0	-2.0	0.0
Radio	14.0	-8.0	-5.0	1.0	4.0	0.0	3.0
Yellow Pages	2.0	-4.0	-2.0	-1.0	-1.0	-1.5	-2.0
Magazines	15.0	-4.5	-9.0	3.0	2.5	2.0	4.0
Network Cable	22.0	-2.0	-8.0	8.5	10.0	7.0	10.0
Local Cable TV	16.0	10.0	5.0	15.0	16.0	15.0	15.0
Online	79.2	10.0	12.0	15.0	20.0	15.0	18.0
Out-of-Home	8.3	-1.0	-1.0	0.0	2.0	1.0	1.0
Other	1.0	-13.0	-20.0	-2.0	3.0	2.0	5.0
TOTAL	8.3	-6.6	-7.4	0.9	3.0	1.6	3.0
Source: Jack Myers Report, 03/10/01