In the short-term, a conflict with Iraq will have little sustained impact on the advertising economy, although a drawn-out ground war is a much more serious threat, says Jack Myers, writing in today’s Jack Myers Report.
US adspend prospects for 2003 and 2004 remain bullish, he says, adding that most analysts are predicting growth for the large cross-media companies. However, a long-running invasion of Iraq is likely to impact on consumer behaviour, with people spending more time indoors and reverting from a spending mode to a debt reduction and consolidation mode. This in turn will lead marketers to reduce their spending.
In the shorter term, war might even boost ad spending: “If total market volume declines due to consumers’ responses to war, marketers must advertise aggressively to capture a greater share of the smaller available market. This generates increased ad dollars, especially benefiting the already strong network and local television business.
“If the war ends within two months, and consumer spending levels begin moving upward, marketers will retain accelerated spending levels to assure that they regain revenues lost during the wartime period,” says Myers.
Forecasts Jack Myers Report has forecast 2003 revenue growth for broadcast networks at 5.0%, network cable at 8.0% and for local and national spot TV at 3.0%. Newspaper ad revenue growth is now expected to outpace Myers’ 1.0% projection and increase by around 4.0%, according to predictions from the NAA (see NAA Predicts Revenue Growth Momentum For US Newspapers).
Radio analysts are forecasting 5.0% growth for 2003, which would also outpace Myers’ forecast of 3.0% growth, says the report. Outdoor advertising is currently ahead of Myers’ forecast of a 1.0% rise, with some estimates for industry growth as high as 5%. JMR predicts 2.5% growth for magazines; this could also prove to be conservative, Myers said today.
The most recent US advertising forecast from Jack Myers Report are shown Myers Is Positive Over US Adspend, 2.8% 2003 Growth Predicted.
