Universal McCann Lowers 2007 US Ad Forecast
Universal McCann has lowered its 2007 US advertising forecast to 3.1% and for overseas growth it now forecasts a gain of 4.2%.
In December, Universal McCann projected a US advertising gain of 5.2% for 2006. Now that actual revenue reports are in however, gain turns out to be only 3.9%.
It expects very little real growth in US advertising in 2007 with a gain of only 3.1% for a projected total of $290.3 billion.
Overseas ad growth is expected to do better than the US in 2007 with growth of 5.2% to $339.8 billion. Combined total worldwide advertising is now expected to increase 4.2% to $630.1 billion this year.
| Outlook For 2007 US National Advertising | |||
| % Change Over 2006 | 2007 Projections $(000,000) | ||
| 4 TV Networks | 3.0% | $17,442 | |
| Spot TV | -1.0% | 11,510 | |
| Cable TV | 4.5% | 20,190 | |
| Syndication TV | -2.0% | 3,615 | |
| Radio | 2.5% | 4,550 | |
| Magazines | 4.0% | 13,595 | |
| Newspapers | 1.0% | 7,015 | |
| Consumer Media Sub-Total | 2.2% | 77,650 | |
| Direct Mail | 5.0% | 61,575 | |
| Yellow Pages | 2.0% | 2,205 | |
| Internet | 17.0% | 10,640 | |
| Other National Media | 4.0% | 38,010 | |
| Total National | 4.2% | $190,000 | |
| Source: Universal McCann | |||
McCann says that it will be very difficult for US ad growth to improve much in the final quarters of 2007 after a very poor opening quarter and little economic growth.
Many major countries had been experiencing slower economic growth than the US in recent years, says McCann. Now the relative growth rates are becoming similar. These economies are not likely to boom but the rate of growth of advertising in 2007 will be relatively better simply because of the easier comparison.
Marketers in the US are currently pessimistic while many overseas are becoming more optimistic. In addition the very large economic gains in such emerging countries such as China, India and parts of Latin America can fuel strong advertising growth in some overseas areas.
McCann says that new media technologies are having an impact on how the goods and services are marketed, especially in the US and most industrialised countries. In less developed emerging markets the demand for strong persuasive advertising messages is growing.
It adds that the evolution in marketing and the new technologies is just beginning to get underway but the need for the delivery of intrusive and strong advertising purchase propositions is not likely to be easily replaced.
| Economic Trends In Major Markets (Percentage Change In Real GDP Over Previous Year) | |||
| Country | 2005 | 2006 | 2007 |
| United States | 3.20% | 3.30% | 2.30% |
| Canada | 3.00% | 3.00% | 2.50% |
| Japan | 2.60% | 2.20% | 2.20% |
| Germany | 1.10% | 2.70% | 2.00% |
| United Kingdom | 1.90% | 2.70% | 2.60% |
| France | 1.20% | 2.00% | 2.40% |
| Italy | 0.10% | 1.90% | 1.70% |
| Brazil | 2.30% | 3.70% | 4.00% |
| Mexico | 3.00% | 3.30% | 4.20% |
| Australia | 2.70% | 2.70% | 2.70% |
| South Korea | 4.00% | 5.00% | 4.50% |
| China | 10.20% | 10.70% | 10.20% |
| India | 8.40% | 9.00% | 8.30% |
| Source: Universal McCann | |||
| First Projections For 2008 (In Billions) | ||
| % Change Over 2006 | Expenditures (In Billions) | |
| United States | -5.00% | $305.0 |
| Overseas | 5.80% | $360 |
| Total | 5.50% | $665.0* |
| *Based on local currencies | ||
| Source: Universal McCann | ||
A recent forecast from TNS Media Intelligence said that total US advertising spending will increase 1.7% in 2007 to $152.3 billion (see US Adspend Forecast To Increase).
In other research, TNS revealed that US advertising expenditure decreased 0.3% to $34.93 billion in the first quarter of 2007 (see US Adspend Decreases In First Quarter Of 2007).