Following a tough few months for national radio advertising in the United States, Merrill Lynch has once again revised downwards its US radio industry growth forecast.
Due to continued declining national advertising radio spend and slightly higher local radio revenue, Merrill Lynch has adjusted its 2004 forecast to just 3.8% from 5.6%. Although, things are expected to improve by 2005 the forecast has still been lowered to 5% from 5.6%.
Merrill Lynch said: “In our opinion, the lingering weakness in radio reflects structural problems – most important is high inventory levels along with weak demand is transferring pricing power into advertisers hands. We believe this must be addressed in order to return to above GDP growth.”
A Merrill Lynch analyst said, it is now hoped that this will be the last revision for this sector, describing it as ‘death by a thousand cuts’.
As for outdoor advertising, the global finance and advisory giants still think that it will steal advertising share from its competitors and as a result has raised Q2 2004 forecasts for Lamar, the groups favourite name in the broadcast sector.
Last month, Merrill Lynch announced that it expects US outdoor advertising to overtake radio by 2005. Saying that outdoor advertising was undergoing positive secular changes allowing it to transform into a growth sector while radio migrates from a growth to mature industry (see US Outdoor Advertising Expected To Overtake Radio By 2005)
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