Zenith Reaffirms Its 3.7% Ad-Growth Prediction

Firm More Optimistic Than TNS, Other Forecasters

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NEW YORK (AdAge.com) -- ZenithOptimedia has reaffirmed its prediction of 3.7% growth in the U.S. this year, providing the brightest take among a recent spate of cloudy forecasts -- even for certain traditional media. TNS Media Intelligence, by comparison, said last month that ad sales would eke out a gain as small as 1.7% in 2007.

ZenithOptimedia says ad spending is likely to slip 1.7% for network TV and 1% for spot TV this year, while internet spending is expected to grow by 29%.

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Bright though it is, the Zenith view isn't exactly rosy. "It's slower growth than we've seen in the past," said Bruce Goerlich, exec VP-strategic resources at Zenith. Part of the problem is the cyclical absence of the Olympics or big elections this year, but the business is also being affected by deceleration in the U.S. economy and marketers' increasing reliance on cheaper digital media as well as nontraditional marketing.

Predicts TV to slip
To be precise, ad spending is likely to slip 1.7% for network TV and 1% for spot TV, according to the latest from Zenith. Newspapers and syndication can expect zero growth in 2007. And radio will only expand 1% this year.

The biggest gain in store belongs, unsurprisingly, to the internet, which Zenith expects to top 2006 by 29%. But cable TV and traditional outdoor, each on a bit of a tear, are poised to collect 6% more revenue this year. And consumer magazines are in line for a 4.6% boost.

"Clearly we're living in a digital age," Mr. Goerlich said. "There is a shift to digital going on, but certain media are showing continuing resilience, those that are providing unique strategic value." Out-of-home, for example, is echoing the old, innate power of network TV to push broad awareness quickly, he said.

Looking further out to 2008, with its elections and Olympics, Zenith forecast gains of 19% for the web, 6% for cable and outdoor, 5% for consumer magazines, 3% for spot TV, 2% for network TV, 1.6% for radio and 1% for syndicated TV. Newspapers are expected to turn in a second flat year in 2008.
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