TNS Media Intelligence has predicted advertising expenditure in the US to reach $145.3 billion in 2005, up 3.4% year on year; not quite the impressive growth of 9.8% enjoyed by the industry in 2004.
Speaking at the AdWatch conference in Manhattan, Steven Fredericks, TNS president and chief executive officer said that he was: “encouraged that the advertising industry continue to show growth” despite this year’s more modest increase.
The first half of 2005 was shown to be more optimistic in terms of ad growth, with TNS forecasting a rise of 4.1% year on year, and a more sluggish rate of 2.7% for the second.
TNS revealed that the majority of media would see growth in 2005, with cable TV and Hispanic media enjoying robust growth of 11.6% and 10.5% respectively.
The internet was forecast to be up by 7.6% like for like, a healthy increase but not as strong as the double-digit growth seen by the medium over the last two years.
Magazines were predicted to be up by 7.5% year on year, with outdoor adspend rising by 5.5%. Newspapers are expected to rise by 3.8% compared to the same period in 2004. TNS estimates syndication television to rise by 3.3%, while network TV adspend is forecast to grow by just 1.1%.
TNS forecasts declines for just three media in 2005, with adspend for radio and business to business magazines predicted to drop by just 0.1% and 0.9% year on year, respectively. Spot TV is predicted to drop by a massive 6.4% in 2005, resulting from the absence of local elections and competition from spot cable.
TNS’s estimates are more optimistic than those of analyst Merrill Lynch, who recently revised its forecasts for US adspend in 2005 down to 4.5% from the previously expected 4.8% (see Merrill Revises 2005 Ad Growth Forecasts Downwards).
An initial forecast by the analyst for 2006, puts US ad growth at 5.5%, while globally the sector is expected to rise by 5.6%.
Merrill also revised downwards its adspend forecasts for the US newspaper industry, predicting adspend (print and online combined) to rise by 3.3% in 2005, down from 4%, based on uneven economy and an unlikely industry resurgence in the latter half of 2005(see Merrill Revises Down US Newspaper Ad Predictions).
New predictions for 2006 see newspaper adspend at 3%, down from 4%, based on slightly lower forecasted economic growth and more muted ad rate increases.
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