Posted on 12/04/2007 10:03:47 AM PST by abb
It was clear early in the year that 2007 wasn't going to be quite the robust year for the media economy that many had hoped, and the year has turned out to be perhaps worse than many thought.
Yesterday, a number revised forecasts came out for media spending, and while they disagreed on how bad things were, they agreed things were bad enough, at least here in the U.S.
Most notable was the revised forecast from Robert Coen, the highly respected chief forecaster at Universal McCann. Coen chopped his forecast for 2007 ad spending in the U.S. to just 0.7 percent growth, to $283.9 billion.
A year ago, Coen, who's considered an optimist by nature, was looking for the U.S. ad economy to grow by 4.8 percent. In June, after a nearly flat first quarter, Coen lowered that figure to 3.1 percent.
The problem, explains Coen in a report: "Marketers trusted their fears more than their hopes."
Coen blames tight-fistedness on the part of marketers, under pressure for increased corporate profits, to resist spending on advertising that doesn't ensure a quick return on investment, a mindset carried over from the ad recession of a few years ago.
One effect, as Coen notes, is that ad spending as a share of gross domestic product has fallen since 2000, the year before the internet bubble burst and the ad economy tumbled into recession. The ad economy recovered but the share has not.
Coen is a bit more optimistic about 2008 ad spending, in large part because of the Summer Olympics and the presidential elections, forecasting 3.7 percent growth, to $294.4 billion. Yet even here Coen offers a note of caution.
"The economic climate is presently clouding, and what is in store for next year is becoming very unclear. The elections and Olympics should help ad growth, but marketers are still extremely cautious and concerned about profits," Coen writes.
One area where Coen is optimistic is internet spending, which he figures will have grown by 20 percent among national advertisers in 2007 and forecasts to grow by 16.5 percent in 2008.
Coen is also a bit more optimistic about ad spending elsewhere in the world.
He sees worldwide ad spending increasing by 4.6 percent in 2008, to $653 billion. Overseas spending, not including the U.S., he expects to grow by 5.3 percent, to $359.5 billion next year, pretty much in line with earlier forecasts.
In other forecasts, ZenithOptimedia yesterday was slightly more optimistic about the U.S. ad economy, forecasting a 4.1 percent rise in ad spending, up from 2.5 percent this year. It blames the credit squeeze, concerns over consumer expenditures and the slowdown in the housing market.
BMO Capital Markets forecaster Lee Westerfield, meanwhile, lowered his forecast for 2007 spending to a 2.6 percent rise, down from 3.4 percent. He lowered his 2008 outlook from 4.3 percent growth to 3.6 percent.
ping
I wonder when accounting scandals will begin to overtake the Big Media Industry as they try to hide the free fall.
That’s a thought. Many of the big papers have been caught by the audit bureau in recent years of inflating their circulation to justify their ad rates. I figure more than half of the circulation—counted as “paid”—by Time and Newsweek is bogus.
“I wonder when accounting scandals will begin to overtake the Big Media Industry as they try to hide the free fall.”
About the same time the HSU scandals force $inator Hildebea$t to withdraw from the election.
PRAVDABCNNBCBS and the Dinosaur fishwraps have been Enronning their books for years while screwing their investors and employees who own their stocks.
That’s a good reason for advertisers to be finding their ads less effective - they’re not being seen.
Apparently Craig’s List is killing the msm’s classified ads, too.
This is the problem with the whole “media deathwatch” crowd. The real story is nearly as bad as the headline.
Here’s the money quote: Coen chopped his forecast for 2007 ad spending in the U.S. to just 0.7 percent growth, to $283.9 billion.
First thing to notice, in spite of the “bad” year ad spending is STILL up from last year, and that “bad” over all revenue figure is almost 284 BILLION dollars, that’s $946 for every man woman and child in the country. And he projecting another 10 BILLION to get added on next year.
The problem with predicting the death of the media is the numbers are too big, even “bad” years have revenue numbers that most industries would kill for.
“Apparently Craig’s List is killing the msm’s classified ads, too.”
It would probably hard to find someone in their 20’s and 30’s who read classifieds or buys classified ads. They use Craig’s list and other sites.
There are a lot of high end fly rods/reels/lines, archery equipment and fishing boats sold on the internet sites for these hobbies/pursuits.
Then, there is EBay which never seems to get mentioned. I don’t use it nor like it, however, we have friends our ages and young relatives, who use EBay all the time.
Wull... That’s RIGHT!!!
The eyecatcher in the headline actually says "Dinosaur Media DeathWatch™." My working definition of Dinosaur Media includes all media that uses old delivery systems in place of new media's Internet. Coen's number includes approximately $20 billion in new media advertising according to a post on Henry Blodget's blog. Blodget goes on to speculate.
The biggest surprise here, of course, is that newspapers still capture 25% of all global ad spending. A large portion of this spending, in our opinion, is based on habit and tradition rather than facts: At some point, we expect, newspaper advertisers will collectively realize that paying up for a display ad that an Internet user definitely sees is better than gambling that newspaper subscribers won't just deposit whole sections unseen on the back stoop. At which point, the newspaper industry's troubles will really begin.
... we bought “A Charlie Brown Christmas” on DVD. The first thing I checked was the duration of the episode—25 minutes. That’s right—only 25 minutes. Amazingly, ABC extended the show twice its length, adding more commercial time than show time—not 10 percent more, or 33 percent, or 50 percent, but over 100 percent. Impossible? Apparently not.
Most striking, the commercials didn’t merely drown out the message of the show; they nuked it.
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