December marked party's end

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The party was over-in December, the first month in years that U.S. ad spending fell, according to Competitive Media Reporting. Though fourth-quarter ad spending rose 5% in 2000 to $27.38 billion from $26.08 billion in the fourth quarterof 1999, spending in December 2000 was down 0.2% from the same month last year.

CMR said total spending in 2000 increased 12.4% to a record $98.72 billion.

The sharpest dollar decline last December came in national network cable TV, where spending dropped 12.2% to $746.9 million last December, compared to $851 million in December 1999 (See story, this page). National newspapers also showed a steep dropoff, with spending down 14.3% to $294.8 million in December 2000 from $344.1 million the previous year. Figures don't include the faltering online ad market figures.

In an ominous sign for the ad market, December was the first time monthly spending decreased from the previous year since 1991-with the exception of July 1997, when spending declined 3.5% from July 1996. The 1997 drop, though, mainly was due to tough comparisons with unusually high summer Olympics spending in July 1996.

In 1991, every month was down from 1990, with a range in decreases of 5.2% in November to 11.8% in September.

The 2001 prognosis isn't good. Merrill Lynch last week downgraded its estimates for a total increase in 2001 ad spending to 2.5% from between 4% and 4.5%. Still, overall numbers are expected to increase slightly because "comparisons will get much easier in the second half of the year," said Merrill Lynch VP Karl Choi. Mr. Choi noted December 1999 was a hard month to beat, since dot-coms fueled an ad spending binge that led to a 19.1%

increase over spending in December 1998. Dot-coms' offline spending peaked in November 1999.

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