AD GROWTH EXPECTED TO SLOW IN 1997;COEN PROJECTS U.S. SPENDING WILL HIT $183 BIL, UP 5.6%

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[new york] Advertising growth in 1997 will slow to its lowest level since '93, according to forecaster Robert Coen.

TV and newspaper executives generally echoed his remarks as the major media companies addressed Wall Street analysts at the annual PaineWebber Media conference.

Total U.S. ad spending will grow 5.6% in '97, to $183 billion, predicted Mr. Coen, senior VP-director of forecasting at McCann-Erickson Worldwide. Ad growth in each of the past three years has exceeded 7%; Mr. Coen projected '96 will close with growth of 7.6%.

WORLDWIDE GROWTH OF 5.9%

On a worldwide basis, Mr. Coen projected 5.9% growth next year, to $414 billion, down from 7.1% growth in '96.

John Perriss, London-based chairman of Cordiant's Zenith Media Worldwide and a co-panelist with Mr. Coen, was more bullish, projecting 6.9% global growth next year, down from 7.8% this year.

Zenith expects to see growth of 10% or more for the second year in a row in all regions except Europe and the U.S., Mr. Perriss said.

Broadcast TV in the U.S. reported a boom year in 1996, said David Poltrack, exec VP-planning and research at CBS. He predicted industry revenue will finish up 12%-the first double-digit growth year since 1984.

Next year, only a 1% to 2% real growth in revenue is being predicted, he said.

Newspapers also expect to advance next year, albeit at a slower pace. In 1997, total daily newspaper revenue should grow 4.9%, good enough to push the industry revenue figure to $51.8 billion, said Miles Groves, VP-chief economist of the Newspaper Association of America. He predicted daily newspapers will finish 1996 up 5.7%, to $48.4 billion.

SIGNS FOR GROWTH

Looking ahead to 1997, Mr. Coen said that "it is necessary to recognize there will be no extra Olympics stimulus, and U.S. political ad demand will decline significantly. On the other hand, there are also reasons to expect that U.S. advertising can again outpace or at least match nominal U.S. gross domestic product growth."

Among those reasons: rising business and consumer confidence, advertisers' continuing shift from trade promotions to consumer advertising and deregulation in the telecommunications industry.

Across all media, Mr. Coen said the fastest-growing ad categories through the first nine months of '96 included drugs and remedies, up 35%, and various financial services, up as much as 46%.

Amid much public debate about tobacco advertising, cigarette ad spending jumped 12%. Telecommunications spending increased a modest 7%, as questions over eased regulations held up marketers' expansion plans.

Declines in ad spending appeared in categories such as food and beer, down 2% each, and household cleaners, down 5%.

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