Zenith Report Paints Darker Ad Picture

Direct mail, benefiting from the afflictions affecting all other advertising categories, is the only medium that will see growth in the U.S. this year, according to revised predictions from Zenith Media.

The direct-mail category will see a spurt of 5 percent growth this year compared to 2000, says a report issued on Friday by the media-services network’s London office.

Overall, the U.S. will experience a total decrease of 1.2 percent in ad spending in 2001 versus 2000, Zenith reports. However, ad spending in all major media categories—national TV, newspapers and radio—will be down 4.2 percent, more than twice the 2 percent decline Zen ith forecast in July.

Network TV, spot TV and syndication will see decreases of up to 5 percent. And while Zenith expects cable to gain 3 percent, the report says that total TV ad spending will be down 2.8 percent to just less than $51 billion.

Other media, such as national radio, magazines and local newspapers, will post average reductions of 3-5 percent. Zenith suggests local radio will suffer the greatest hit, changing its earlier forecast of a 6 percent drop to an 8 percent shrinkage over last year. The picture Zenith paints for the out-of-home ad category is hardly rosy, although with a potential 2 percent decline, it could be worse.

Direct mail’s expected success is due to a shifting of budgets to measurable and accountable advertising. The softness in the general ad market also allows for significant spending growth for direct response TV that utilizes the unsold general airtime inventory and purchases this airtime on a discounted basis, the report says.

The report cites the continuing decline in corporate profits among leading advertisers as the primary reason for the more dismal outlook.