NEW YORK Domestic ad spending growth will continue to trail global gains next year as the Olympics, U.S. elections and continued Internet advances are counterbalanced by sluggish underlying trends.
That was one key theme of two closely watched forecasts unveiled Monday at the annual UBS Global Media & Communications Conference.
Bob Coen, director of forecasting at media agency Universal McCann, predicted the U.S. ad market would reach $295.4 billion in 2008, up 3.7 percent.
Coen today lowered his 2007 prediction to $283.9 billion, which would amount to a 0.7 percent gain for the year. In the summer, he projected an already lowered 3.1 percent gain.
Meanwhile, ZenithOptimedia CEO Steve King estimated that U.S. ad expenditures for major media would rise 4.1 percent in 2008. He also reiterated a recently downgraded 2007 growth forecast of 2.5 percent. A year ago, King predicted a 4.1 percent increase for the current year, but he has twice lowered that projection.
King projected global ad spending in major media to rise 6.7 percent in 2008 to $485.6 billion, after a 5.3 percent gain this year to $455.1 billion. Coen predicted a global ad gain of 4.6 percent to $653.9 billion.
King also argued that the last ad recession came on the heels of the dot-com bust, but the Web market today is more developed and rational. (The Internet is poised to overtake magazines in 2010 as the third-largest ad medium in the world, he said.)
Besides the Olympics and U.S. elections, the global ad market also will benefit from the European soccer cup in Austria and Switzerland in the summer, King said. Without them, worldwide growth will be basically unchanged from 2007.
King projected $2 billion in 2008 political spending, only to be outdone by what he estimates will be a $3 billion boost from the Beijing Olympics. The European soccer competition will add $1 billion to the global ad pie.
In the U.S., Coen sees ad spending for the Big Four broadcast networks up 2.2 percent in 2007 (to $17 billion), with cable TV up 6 percent (to $20.5 billion), Internet up 20 percent (to $10.9 billion), and national radio down 3 percent (to $3.4 billion). Next year, he expects 5 percent growth for the broadcast networks and cable TV each, a 16.5 percent Internet advance and a 1 percent radio gain.