The prediction comes as Mr. Coen released his final estimate for ad spending in 2007, concluding there had actually been a 0.7% decline, as opposed to a 0.7% increase for the year as originally forecast. "It is apparent that things were even worse than many had expected at the close of last year," Mr. Coen wrote in his report.
Year off to a bad start
National advertising in the first four months of 2008 was "exceptionally slow" for most major media in a year including the Summer Olympics and a presidential election, Mr. Coen said, citing the writers strike as one potential culprit. The outlook for 2008 national advertising shows a total increase of about 4.2% to $193 billion, with internet advertising expected to show the most growth, 12% over 2007 to about $11.7 billion.
The faltering economy has had the most severe impact at the local level, said Mr. Coen, who added that the reduction in the number of local entrepreneurs has "cut into the ad sales by most media to local market customers." In the first quarter of 2008, spending on newspaper classified ads fell almost 25%, newspaper retail fell almost 9% and spot radio fell 6%.
The outlook for ad spending is much brighter worldwide, with increases in countries such as China, Russia, India and Brazil expected to push overseas ad growth to 6.3%. Total worldwide spending is expected to rise by 4.4% in 2008, a slight revision from Mr. Coen's December forecast of 4.6%.
No relief in sight
And although the economy is expected to gradually improve next year, it's not likely to spur expansion in ad spending any time soon, Mr. Coen said, because 2009 will be a post-election/Olympics year.
"I think 2009 is too soon to see much of a comeback and recovery," he said.
Meanwhile, in a forecast for emerging media spending also released today, Magna's Brian Wieser said the "hyper-growth" of emerging media platforms, including search, social media, online video, gaming and mobile, is slowing a bit, but he noted that advertisers are still expected to increase spending in emerging media by 25.8% for a total outlay of almost $19 billion in 2009.
"It is impossible to keep up this hyper-growth, but in absolute dollars, it's still growing quite rapidly," he said.
Search offers hope
Search still dominates spending in emerging media, with spending expected to total almost $14 billion in 2009. Mr. Wieser said online video is expected to be one of the fastest-growing emerging mediums in 2009, with a growth rate of 45% and spending of $800 million.
"It is the one medium that advertisers are most comfortable with," Mr. Wieser said. "The assets that are required can be the same as those with TV, and there has been an increase in supply of inventory of A-grade content."