US Adspend Expected To Grow 5.6% This Year
US advertising is expected to grow by 5.6% this year, with a gain of 6% in overseas advertising. In addition, a total worldwide advertising growth of 5.8%, to $602.4 billion, is expected for 2006, according to new figures released by Universal McCann.
Bob Coen, senior vice president and director of forecasting for Universal McCann, expects relative improvement in advertising growth in 2006, although does not feel that a sharp shift in that direction is likely. He also notes that 2007 will be without the stimuli the Olympics and elections offered in 2006.
Overseas ad growth, in local currencies, is expected to maintain a growth rate slightly stronger than the US rate in 2006. ZenithOptimedia recently forecast that global adspend would increase to 6% in 2006, up from 4.9% in 2005 (see Global Adspend Forecast To See 6% Growth In 2006).
Universal McCann’s final ad total for 2005 is for a gain of only 2.8% in comparison with figures released in December 2005 which put growth at an expected 4.6%. This less than expected growth is explained by fourth quarter numbers being more sluggish than was assumed in December.
In Q1 2006 dot.com marketers continued to raise consumer media budgets, and Universal McCann thinks it likely that they will spend an estimated $4.625 billion in 2006, a 25% rise on the 2005 level.
TV network gains, boosted by the Winter Olympics and strong demand for Super Bowl ads in Q1, are expected to moderate as the year unfolds, although the forecasted gain of 6.5% that was made in December appears to be reasonable for Broadcast TV Network advertising growth in 2006.
National spot TV ad revenues, predicted to gain 8.5 % in last December’s forecast, are expected to equal that earlier prediction or perhaps even surpass it.
National TV advertising is now expected to increase by 7.1% in 2006, a little higher than the latest 6.5% forecasted growth for nominal GDP in 2006. However, Coen says that the fact that the national budget growth will slightly outpace the expected growth in the total economy is no reason for concluding that total advertising demand is booming.
National advertising in the US is expected to improve in 2006 but, says Universal McCann, relatively slow ad growth continues to be expected from local marketers.
| WORLDWIDE AD GROWTH: 1990-2006 | ||||||
| USA | OVERSEAS | TOTAL WORLD | ||||
| $bn | % change | $bn | % change | $bn | % change | |
| 1990 | 130 | 3.9 | 145.9 | 11.8 | 275.9 | 7.9 |
| 1991 | 128.4 | 1.2 | 153.9 | 5.5 | 282.3 | 2.3 |
| 1992 | 133.8 | 4.2 | 165.4 | 7.5 | 299.2 | 6 |
| 1993 | 141 | 5.4 | 163.2 | -1.3 | 304.2 | 1.7 |
| 1994 | 153 | 8.6 | 179 | 9.7 | 332 | 9.1 |
| 1995 | 165.1 | 7.9 | 205.9 | 15 | 371 | 11.7 |
| 1996 | 178.1 | 7.9 | 212.1 | 3 | 390.2 | 5.2 |
| 1997 | 191.3 | 7.4 | 210 | -1 | 401.3 | 2.8 |
| 1998 | 206.7 | 8 | 205.2 | -2.3 | 411.9 | 2.6 |
| 1999 | 222.3 | 7.6 | 213.8 | 4.2 | 436.1 | 5.9 |
| 2000 | 247.5 | 11.3 | 226.8 | 6.1 | 474.3 | 8.8 |
| 2001 | 231.1 | 6.5 | 209.6 | -8.6 | 440.9 | -7.9 |
| 2002 | 236.9 | 2.4 | 213.6 | 1.9 | 450.5 | 2.2 |
| 2003 | 245.5 | 3.6 | 244.4 | 14.4 | 489.9 | 8.7 |
| 2004 | 263.8 | 7.4 | 279.8 | 14.5 | 543.6 | 11 |
| 2005 | 271.1 | 2.8 | 298 | 6.5 | 569.1 | 4.7 |
| 2006 | 286.4 | 5.6 | 316 | 6 | 602.4 | 5.8 |