CMR: Ad spending set to grow slightly

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Ad spending will grow marginally this year following a 2001 performance that was the industry's worst since the 1990-1991 recession, according to a new forecast by Taylor Nelson Sofres' CMR.

CMR, a provider of data on ad expenditures, estimates total U.S. ad spending for 2001 at $94.6 billion, a drop of 9.4% from 2000's $104.5 billion. Its 2002 forecast to be released this week calls for spending growth of 1.5%, to $96.1 billion.

"In 2002-hang in there," said David Peeler, CEO of CMR. It will be a long climb out of the ad recession, he predicted, with no real improvement until late in the second half.

Spending will shrink in the first and second quarters by 5.4% and 3.3%, respectively, according to the forecast. Growth of 3.8% is forecast for the third quarter before a 10.9% jump in the year's final quarter.

The fourth-quarter performance would compare with a disastrous fourth quarter of 2001, when CMR estimates spending dropped 14.4%. The October data, released last week, shows a grim start to the quarter (see Turn Signals, P. 8).

The steepness of the fourth-quarter decline was exacerbated by the Sept. 11 terrorist attacks. By comparison, the fourth quarter of 2002 should enjoy seasonal advantages such as midterm elections and the start of the TV fall season.

snapping back

"The fourth quarter has got to snap back," said Mr. Peeler. "That's the quarter where-if it's going to happen-it will happen."

Magazine ad dollars will grow just 0.6% in 2002, because magazines have longer lead times than other media. By contrast, newspaper spending will grow by a robust 3.1%, while spot TV will rise 2.5%, according to the forecast.

"If there's going to be some bright spots, it will be in the local situation," Mr. Peeler said, citing spending on midterm elections.

Although the year should end on a high note, he stressed that the industry will have a bumpy first quarter, even with an Olympic boost, and a tough year overall.

"When we look back on 2002, we'll say, `Wow, we got out of that hole,'" said Mr Peeler. "It was a much deeper hole [than expected] and it is going to take us longer to fill it in."

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