‘Ugly’ Numbers Prompt Bearish Outlook For US
Once again Myers Reports has downgraded its media expenditure forecasts (see Forecasts) and now sees no indication of a Q4 upturn. The new numbers, described by chief economist Jack Myers as ‘ugly’, forecast that growth in 2001 will fall 4% in year on year comparisons and the picture is particularly bad for TV where comparisons to last year are particularly harsh.
“Having now seen the broadcast and cable upfronts pretty much play out, we are in a position to more thoroughly evaluate what the year-end numbers will look like,” said Jack Myers “and those numbers are, in a word, ugly. We see no indications whatsoever that the oft-mentioned ‘fourth quarter turnaround’ will occur, prompting us to issue what is probably the industry’s most bearish forecast for this year as well as the next several years.”
“The helium-filled economy of 1999 and 2000, with annual growth approaching double-digits, has burst,” Myers continued. “We are in the early stages of a long-term period of slow growth in the advertising and media sector. Advertising recessions historically are deeper and more sustained than general economic downturns.”
Amongst the reasons for the bearish numbers, Myers cited an oversupply of the media inventory, consolidation amongst media buyers resulting in greater negotiating prowess, set backs in the deployment of digital and broadband technologies resulting in lower investment in advertising and a lack of consistency in regulatory bodies.
Myers believes that online will be the strongest growing of any advertising medium in coming years but warns against the “overly enthusiastic” online forecasts from other analysts. “We agree that online advertising will have the strongest growth of any medium for the next several years,” said Myers, “but the numbers being thrown around by other forecasters for 2001 and beyond are way out of line with reality.”
Source: Myers Reports
| 1998 | 2006 | Comparison 1998 – 2006 | ||||
| Spending ($m) | $ | % share | $ | % share | % change (spending) | % change (share) |
| Newspapers | 44,300 | 25.5 | 48,136 | 23.8 | 8.66 | -6.73 |
| Broadcast Networks | 14,297 | 8.2 | 14,711 | 7.3 | 2.89 | -11.68 |
| National Spot TV | 10,659 | 6.1 | 9,702 | 4.8 | -8.98 | -21.87 |
| Broadcast Syndication | 2,609 | 1.5 | 2,664 | 1.3 | 2.11 | -12.36 |
| Local Broadcast TV | 12,169 | 7.0 | 10,905 | 5.4 | -10.39 | -23.09 |
| Radio | 14,950 | 8.6 | 16,848 | 8.3 | 12.70 | -3.27 |
| Yellow Pages | 12,100 | 7.0 | 11,669 | 5.8 | -3.57 | -17.23 |
| Magazines | 10,400 | 6.0 | 18,251 | 9.0 | 75.49 | 50.63 |
| Network Cable TV | 6,560 | 3.8 | 15,122 | 7.5 | 130.51 | 97.86 |
| Local/Regional Cable TV | 2,520 | 1.5 | 8,159 | 4.0 | 223.75 | 177.89 |
| Online | 1,500 | 0.9 | 9,921 | 4.9 | 561.37 | 467.68 |
| Outdoor | 1,600 | 0.9 | 2,173 | 1.1 | 35.80 | 16.56 |
| Other | 40,000 | 23.0 | 34,068 | 16.8 | -14.83 | -26.90 |
| Total | 173,664 | 100.0 | 202,327 | 100.0 | 16.50 | |
| Source: Myers MediaEconomics, August 2001 | ||||||