NEW YORK — Despite fears that the war in Iraq would drive down advertising dollars, Madison Avenue is breathing a sigh of relief while projecting that ad spending will be up 4.3% in 2003 to $125 billion. Optimism springs from a robust upfront season, the upcoming elections and the continued growth of Hispanic media spending.
The yearly projection is down slightly from first-quarter ’03 growth of 4.9%.
Spanish-language TV is the top projected growth area, at 16.9% for this year. Syndicated TV follows with 9.6% and the Internet is expected to spike 7.4%.
The announcement was made Tuesday at a Gotham advertising conference.
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“Even without the peaks found in years where Olympic spending and presidential election activity buoy overall spending, 2003 is expected to continue the sustained growth we’ve tracked since the third quarter 2002,” said Steven Fredericks, prexy-CEO of TNS Media Intelligence/CMR.
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Unlike the Sept. 11 terrorist attacks, which cost TV $313 million overall in lost ad revenue, the war in Iraq had only a $70 million effect. Furthermore, the war’s impact was felt only briefly. Cable news, for example, declined sharply in the first week of war, but rebounded steadily the following week.
“Life went on” was the media’s hindsight reaction to Iraq. In contrast, 9/11 caused “Life will never be the same” thinking, industryites said.
Another reason for the generous forecast is election spending for next year’s three gubernatorial and 40-plus mayoral races, which is expected to generate $250 million in 2003; spending on the presidential election alone should generate between $300 million and $400 million.
Finally, Spanish media spending is predicted to continue to outpace total ad spending growth this year. Spanish media spending saw 25% growth from 2001 to 2002, compared to growth of just 4% in total ad spend in that period.
Industry leaders also discussed the sometimes fractious relationship between Madison Avenue and Hollywood, though they agreed that relationship would inevitably strengthen with the success of cross-platform partnerships like the “Austin Powers in Goldmember”-Pepsi Twist and “American Idol”-Coca-Cola deals.
“The biggest cultural issue is that (Hollywood wants) to maintain a divide to effectively keep them in control of the process,” said Bruce Redditt, exec VP of the Omnicom Group. “There are a lot of very young, very creative producers who have yet to make the relationships they need to make.”
Roger Fishman, senior exec of the Creative Artists Agency, said entertainment companies and advertisers are working toward the same end: consumers. “At the end of the day, the corporations will be around and will be (an entertainment company’s) life support. We need a more strategic alliance. At the end of the day we’re all beholden to our client base.”