Pivotal Research: Ad Market to Grow 4% New Year
When one of Wall Street’s leading media analysts changes his mind, we should take notice. This week, Brian Wieser, Pivotal Research, revised his earlier projections for 2018 ad spending. The market looks stronger than it did earlier this year.
Previously, Wieser had expected ad market growth of 4.8% in 2018. Right now, it looks like final spending will come in at about 6.5 percent. Positive economic trends are driving ad spending. Specifically, Wieser links growth in personal consumption and industrial production to the demand for more advertising.
The growth of digital advertising remains impressive. Like other analysts, Wieser notes that this growth isn’t the result of businesses shifting traditional ad spending into digital formats. Instead, marketers like small businesses and e‑commerce operators are increasing their reliance on digital advertising.
While TV has had a banner year, 10% growth rate, political spending fueled the demand. Going forward, Wieser still believes national TV will struggle to hold onto its share of ad spending as “the dominant advertisers on that medium are generally weak. Newer advertisers are not dependent enough on TV to make up the difference.”
Print is another format facing challenges. According to Wieser’s measurements, print’s share of the ad market dropped from 28% in Q3 2017 to 24% in Q4 2018. Presently, print accounts for $35 billion in ad spending. As far as Wieser is concerned, media companies will continue to have demand for print advertising. The print ad budget is often the source of funds used to pay for a shift to digital advertising, but Wieser doesn’t expect a complete shift as print delivers customers for marketers.
Looking ahead to next year, Wieser also updated his projections. Previously, the expected ad spend increase was at 3.5 percent. It now stands at 4 percent. The economy will likely do well again in 2019, but perhaps not as well as this year.
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