U.S. Marketers to Maintain Ad Spending Despite Global Turmoil
Global uncertainty can have a negative effect on the U.S. economy and advertising industry. Analysts have been watching both the catastrophe in Japan and the continued unrest in the Middle East and are trying to predict the impact on U.S. marketers. Researchers see downward pressure on the global ad market and project a small drop from previous estimates. Global spending is now expected to rise only 4.2% this year, to a total of $470.8 billion.
However, ZenithOptimedia analysts are still maintaining their expectation of a 2.5% increase in the U.S. ad market which would bring spending to $155.2 billion. The one caveat would be oil prices. Continued price increases in that sector, notes Tim Jones of ZenithOptimedia North America “could affect ad spending in developed economies and globally."
Ad spending increases will accrue in significant percentages for the following media formats:
- Internet 13%
- Cable TV 10%
- Cinema 6%
Regardless of the recovering economy, some media channels will continue to suffer declines: Newspapers (-8.5%), consumer magazines (-1%), and business publications (-4%).
According to ZenithOptimedia analysts, cable TV increases will be largely fueled by auto industry spending. The banking and financial sectors will also be big advertisers this year.
Both the scatter and the upfront broadcast TV market will cost more. This sector will see a 3% increase this year, 2% in 2012 and 1% in 2013.
However, syndicated TV will drop by 2% this year and perhaps another 8% in 2013. Analysts blame this drop on the end of Oprah’s long run on syndication and the lack of any major players who will draw huge audiences after her departure.
Of course, these estimates are updated regularly. Additional international events or large-scale mergers like AT&T and T‑Mobile USA deal can further impact marketer spending.[Sources: Steel, Emily. Ad Spending to Rise. WSJ.com. 11 Apr. 2011. Web. 18 Apr. 2011; Lafayette, Jon. Zenith Sees Upfront Prices Up Double-Digits. Broadcastingcable.com. 11 Apr. 2011. Web. 18 Apr. 2011]