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Merrill Lynch gives conservative advertising forecast for 2006

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Dec. 2 New York—Advertising spending is forecast to grow 4.5% in 2006, according to Merrill Lynch’s “Advertising & Marketing Services: Annual Advertising Update by Industry” report.

That is a decrease from Merrill Lynch’s previous prediction of 5.2% growth for next year. Its 2005 forecast was also downgraded, from its original prediction earlier this year of 3.7% growth, to 3.2%.

Merrill Lynch said if direct mail is excluded, 2005 growth would be a mere 2.3% and that growth next year would be 4.5%.

Uncertainty and the proliferation of measurable media are among the factors cited for the conservative outlook.

“Along with corporations’ cautious attitude towards ad spending in an uncertain environment, we think the emergence of the Internet and other newer forms of marketing is allowing advertisers’ dollars to work harder with more measurability,” according to the report.

—Carol Krol

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