3% uptick projected in advertising spend

Just in time for the upfront selling season, a top ad biz forecasting firm is raising its estimate for total U.S. advertising expenditures this year — a revise that includes even stronger projected gains for the TV sector.

Total spending on all advertising expenditures will grow by 3%, compared to an earlier estimate for 2011 of 2% in December, according to a report released Monday by ZenithOptimedia. The nets should be able to capture double-digit gains in pricing at the May upfronts, the firm said.

Zenith’s numbers confirm what is already a great deal of optimism among not only broadcasters but cablers, too, about upfront sales, ahead of the actual wrangling with advertisers that should begin in June after the spring parade of new programming presentations wraps up with the major broadcast nets during the week of May 16.

This good news for the U.S., however, was tempered by some worries for the overall global ad market. Due to the turmoil in Japan and the Middle East, Zenith said it is lowering ad growth estimates to 4.2%, from 4.6%, adding it believes those world eventsmay have pulled $2.4 billion in ad dollars out of the market.

Meanwhile, the U.S. economy’s return to full health will be protracted. “It will take several years for advertising spending to reach the level it was in 2008,” Zenith said.

For the U.S. networks, the strongest demand is coming from auto, telecom and banking advertisers. Zenith did point to the departures of two leading TV stars this year, Charlie Sheen from “Two and a Half Men” and Steve Carell from “The Office,” but added that “CBS will fare better than NBC, as it has a slew of highly rated procedurals and solid comedies.” Zenith did not address the potential impact of an NFL players lockout on TV ad sales.

If the outlook is rosy for the broadcasters, it is even brighter for cable, with ad spending projected to grow by 10% this year vs. 9% forecast in December. Zenith pointed out new TV ad formats on cable, including Turner Broadcasting bundling inventory targeted at specific demos.

Spot TV ads are looking good, too, with a 4% increase projected for this year.

“The 2011 marketplace will not return to the softness of 2009, predominantly due to the return of two critical categories — retail and automotive,” Zenith said.

The one disappointment in TV for this year is syndication, where ad spending is projected to be down 2%, largely due to “The Oprah Winfrey Show” going off the air.

Elsewhere, in-theater cinema advertising will be robust, with Zenith projecting 6% gains.

“Much of cinema’s success in gaining advertising dollars has been due to increasing adoption of digital networks for delivering ad to movie theaters, allowing for faster planning and execution as well as strategic targeting of specific movies and markets,” the firm said.

With advertisers expected to boost spending on the Internet by 12.6% this year, it puts the Web on pace to exceed newspapers as the second largest ad category in 2013. TV has the largest share at 37.3%, with newspapers at 19.6% and the Internet at 15.2%. The 2011 Internet forecast was actually revised downward from a 15% estimate in December, partly due to a major Web category — classifieds — still feeling the impact of sluggish job and real estate markets.

The bad news in Monday’s report was newspapers, which will see an 8.5% projected decline in spending this year, followed by consecutive 8% declines in 2012 and 2013.

“The Internet and other emerging media spending will continue to grow at the expense of traditional media,” Zenith concluded.

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