Writers Strike Clouds Ad Forecast

TNS Media Intelligence Outlook for '08 Comes With Caveats

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NEW YORK (AdAge.com) -- TNS Media Intelligence's forecast for advertising spending in 2008 comes with a giant asterisk. Although the group predicts overall U.S. spending to increase 4.2% over 2007, the writers strike gave Jon Swallen, senior VP-research at TNS, much reason to pause in predicting spending for the individual media sectors.

"I wish I had a crystal ball," he said. "I worried over the issue at length because it's hard to assess when we really don't have a clear lead on the advertising-expenditure impact of the writers strike. The longer it lasts the worse it gets for the networks."

TNS pegs network TV to increase by 2.7% over 2007, mostly due to a record year for political ad spending and an additional boost from this year's summer Olympics.

February sweeps
But with February sweeps around the corner and original episodes from the fall broadcast season running out in a matter of weeks, the networks will be left with reality shows and midseason replacements to fill the void. Mr. Swallen said consumers could develop two new consumption habits if the writers strike continues to erode original programming.

Option one: "People turn off their TVs all together," he said. But option two seemed a lot more likely. "People [would] change the channel and watch something on cable. As we've seen over an extended period of time, audience erosion from broadcast to cable has implications for ad spending on each side of the ledger. Broadcast's loss could be cable's gain."

Elsewhere, TNS predicts that online spending will see the largest increase of any medium in 2008, increasing 14.4%. That significant gain comes at the expense of newspapers and radio, which are projected to fall 1% and 0.3% in measured spending over the period from 2006 to 2007. Mr. Swallen attributes both decreases to the decline in spending from major categories like automotive and retail. There was also a pullback in 2007 by local advertisers, newspapers and radio's bread and butter.

More bad news for radio
A nine-month delay in switching to Aribtron's more accountable portable-people-meter currency in major markets such as New York, Chicago and Los Angeles could also end up hurting radio in its efforts to become more scaleable and boost spending. As a result, radio has been forced to change what could have been a story for 2008 into one for 2009.

"[Radio] has certainly rearranged its entire deck of cards in terms of demographics, stations and particular ad categories," he said. "Now they've sort of forced it all into a day of reckoning [with PPM]. Eventually, a new deck of cards is going to come into play, so it's been delayed but it hasn't been shelved. When a new deck does come into play, all this begins to play out."
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