Coen Boosts '04 View

The U.S. is due for greater ad-spending growth this year than previously expected—at least, according to Universal McCann senior director of forecasting Bob Coen.Coen, whose report is seen as a bellwether for the industry, spiked his 2004 growth forecast to 7.3 percent from the 6.9 percent estimate released in December. Reiterating the importance of this year's Olympics and political races, Coen said such spending would generate more than $263 billion in U.S. advertising.His revised outlook projects that ad spending on cable will jump 14 percent to $16 billion; the four major TV networks will rise 10 percent to $16.5 billion; and spot TV will climb 9 percent to nearly $11 billion. Coen predicts radio will increase 7 percent to $5 billion; newspapers, 6.5 percent to $8 billion; and magazines, 5 percent to $12 billion. The Internet, the medium forecast for the largest growth percentage, will rise 20 percent to $7 billion."Bob Coen struck a tone of optimism in the advertising industry," said Lee Westerfield, a media analyst with Harris Nesbitt in New York. "The idea of 7 percent growth would signal the first real recovery in accordance with historical cycle patterns."But for his part, Westerfield said he's "more subdued in terms of growth expectations across the board." He added that the story of the year is that cable, no longer a secondary consideration, is developing coincidentally to the network upfront selling season."Viewership is shifting to cable, and we're seeing higher ratings for original programming on cable," he said. "What surprises me is that not all media are following suit. Radio trends are choppy, and cable is gaining share both locally and nationally."Coen said that networks have been able to raise prices because of the Olympics, and local television will fare well because of the coming political season. "Advertisers are not turning away—the momentum is back," he said.By advertiser category, the big-spending automobile industry grew 8 percent in the first quarter across major media—including national broadcast, cable networks, spot TV and magazines—compared with the year-earlier period. Pharmaceuticals rose 21 percent; telecoms, 6 percent; and movies, 5 percent. The only major category where spending declined in the first quarter was food marketers, dropping 4 percent.Among key industrial countries, Mexico is expected to grow the most at 8.5 percent this year, along with Britain, which Universal McCann forecasts will see 4 percent spending growth. Among the world's fastest-growing economies, China will realize 35 percent growth this year, while Indonesia will see a 30 percent bump in ad spending, the forecast said.In Coen's first projection for next year, he forecasts that U.S. advertising will rise 6.5 percent to $280 billion, pegging international growth at about 5.5 percent to $270 billion, based on local currencies.

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Coen Boosts '04 View

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