The Fat Years Haven’t Returned, but the Next Five Years Shouldn’t Be Quite as Lean

Spending on advertising and promotion won’t exactly boom in the next five years. But it will be brisker than it was in the last five years. That’s the prediction from Veronis, Suhler & Associates in its latest Communications Industry Forecast. Adding promotion outlays together with ad spending in measured and non-measured media, the investment-banking firm foresees a compound annual growth rate of 5.7% for 1992-97, versus 4.6% for 1987-92. While the rise in the total is modest, people in agencies and the media will be pleased to learn that the gain is forecast to come mainly from spending in measured media. While that component had a compound annual growth rate of just 2.8% for 1987-92, the rate is expected to be 6.2% for 1992-97. Growth in promotion spending is expected to slow slightly – from 5.7% to 5.3% – while the growth rate in ad spending on non-measured media rises a bit, from 5.1% to 5.8%. What will drive the upturn in measured-media spending? Magazines are forecast to see the briskest growth – a 7.1% compound annual growth rate for 1992-97. TV ad spending is expected to post a 6.3% growth rate. The report also suggests that network TV has ended its long decline vis-a-vis cable TV and should fare better in a 500-channel environment than the current cable networks will. Ad spending in daily newspapers is expected to show a 5.4% compound annual growth rate – vastly better than the 0.8% of the past five years.
Copyright Adweek L.P. (1993)