The good news in the most recent Veronis Suhler Stevenson (VSS) Communications Industry Forecast 2004 ‑2014 report is that the communications industry will “slightly outperform nominal GDP” between now and 2014. The more difficult news for some operators in this industry is that businesses offering traditional media may see their opportunities shrink. Instead of reaching for mass audiences with a broad message, more marketers will want to spend money on targeted media efforts. This trend has big implications for operators in the huge communications industry.
The compound annual growth rate in total communications spending from 2005 to 2009 was 3.4%. VSS analysts expect this number to jump to 5.8% between 2010 and 2014 as the economy recovers. In 2014, the communications spending industry will be valued at $1.416 trillion.
The VSS report presents data by industry sectors and by revenue streams.
Spending in the main industry sectors will break out as follows in 2014:
- Business/professional information and services. An 8.02% compound annual growth rate between 2009 and 2014 will bring spending to $249 billion.
- Education/training media and services. For–profit education markets are expected to bring spending to $311.87 billion.
- Entertainment/leisure media. This is the largest sector with projected value of $353.87 billion.
- Targeted media. Spending on pure-play Internet and mobile services, outsourced custom publishing and branded entertainment will bring this sector to $264.73 billion.
- Marketing media. The combined industries of public relations, word-of-mouth marketing, B2B promotions and consumer promotions will reach $77.23 billion.
- Consumer advertising. Traditional companies in broadcast TV, newspapers, radio, consumer magazines, out of home and yellow pages will achieve a spending level of $159.3 billion.
The way VSS sees it, revenues are derived from 4 main sectors in the industry. In 2014, revenue will reach the following levels:
- Institutional End User — $661.48 billion
- Consumer End User — $292.07 billion
- Advertising — $234.90 billion
- Marketing Services — $227.82 billion
While all sectors should see growth between now and 2014, VSS analysts expect institutional end-user and consumer end-user categories to increase the most. In large part, the growth will be driven by a shift to digital media formats.[Source: New VSS Forecast. Vss.com. 10 Aug. 2010. Web. 18 Aug. 2010]