Zenith Optimedia Group revised its outlook for U.S. ad spending upward today, predicting that spending in major media in the U.S. will shrink by only 1.2 percent this year, to $138 billion. In April, the closely watched forecast had 2002 media spending declining by 1.8 percent to $132 billion.
The report noted that the recent aftershocks in the stock market resulting from turmoil afflicting cor por ations such as WorldCom, Xerox, Tyco and others lately represent the extreme point of a general malaise vis-à-vis profits.
However, the overall economy does show signs of improvement, albeit very gradually, said Rich Hamilton, Zenith Optimedia's chief executive for the Americas.
"The U.S. ad market is like a huge ocean liner; it turns slowly," Hamilton said. "Because of the large size of the U.S. economy and its tremendous diversity, it always accelerates slower than people think. And that's the situation now."
The upfront market was more robust than many predicted—$8.3 billion this year compared with last year's $6.9 billion—but Hamilton noted that much of that money was merely held back last year and doesn't reflect a major buying push by advertisers.
Media economist Jack Myers, publisher of the Jack Myers Report, agreed with Zenith's outlook for this year. Adding online and yellow-pages ad spending to the major broadcast and print media analyzed by Zenith, Myers initially anticipated a decline of 0.4 percent for 2002. This week, he revised his forecast for media spending for 2002, predicting that it will be flat in comparison with 2001 at about $155 billion.
But where Zenith forecast an increase of 1.9 percent in 2003 versus 2002, Myers was slightly more optimistic, predicting growth of 3 percent in ad spending.
"I have a high degree of confidence in consumer spending and I see a good deal of strength in a number of sectors, especially the packaged-goods area," Myers said.