New York—Prominent ad industry forecaster Robert J. Coen has revised his growth prediction for this year downward to a 5.6% increase. In December, Coen had predicted 5.8% growth.
Coen, senior VP-director of forecasting at Universal McCann, delivered his midyear advertising briefing for investment analysts and the business media on Wednesday. He said ad dollars are projected to total $286.4 billion this year.
Coen gave several possible explanations for the below-expectations growth of advertising.
Ad spending from the mid-1990s through 2000 was probably “highly over-expanded,” and during those years media prices rose faster than inflation, Coen said. Many marketers could not maintain their spending pace for advertising and “corrections were inevitable,” he said.
Media channels posting growth so far this year include Internet and direct response advertising. Despite the postal rate increase in January, direct mail advertising volume in the first quarter grew 3.5% over the year-earlier period, to 20.6 billion pieces. Coen said restrictions on telemarketers likely played a role in the growth.