Network TV Sales Could Rise 12%

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NEW YORK ( -- The Olympic Games and the U.S. presidential election will generate billions of dollars of additional advertising spending for 2004, bolstering totals that could come closest to the highs
of 2000, according to speakers at a major financial conference today.

Forecasters at the UBS Media Week conference put forth their most optimistic readings yet for 2004, even though ad spending won't reach that of 2000. With U.S. corporations showing strong profit growth, the corporate sector is poised to expand its capital investment, including in marketing and advertising, the experts said.

Sustainable economic expansion
"It looks like a very sustainable economic expansion is finally in place ... so the overall expectations, the general trends we see in media are pretty good for 2004," said Robert Coen, director of forecasting for Interpublic Group of Cos.' Universal McCann.

Mr. Coen predicted U.S. spending in 2004 will grow to $266.4 billion, or 6.9% above this year's spending. Spending in the top four TV networks -- ABC, CBS, Fox, NBC -- is expected to grow 12%, thanks to next year's Summer Olympic Games in Athens and political campaign advertising running up to the U.S. presidential election. Cable TV will continue to grow its share of spending, rising 12%, and magazines will rise 5% as the print media continue to recover, albeit more slowly than electronic media.

$2 billion
The elections and the Olympics will each add approximately $1 billion to the world's total ad spending growth in 2004, and the European soccer championships will add another $500 million, said John Perriss, CEO of Publicis Groupe's Zenith Optimedia. But he warned that with nearly 17% of next year's growth tied into one-time events, the absence of those events could create a "void" in 2005 and drag down totals for that year.

A real factor in spending next year will be corporate profitability, Mr. Perriss said. As consumer spending -- fueled lately by credit debt -- loses steam, corporations are increasingly picking up the slack, he said. He noted spending by the top 10 advertisers is largely up in double-digit percentages, even as product categories remain mixed.

"I don't think it's categories we should be following, it's companies," Mr. Perriss said.

Global ad spending
Zenith forecast global ad spending will grow 4.7%, or 3.6% after adjusting for inflation. North America will show 3.9% growth after inflation, and Europe will finally show positive numbers after inflation, up 2.2%, and the Asia Pacific region will grow 4.6% after inflation, in spite of continued sluggishness in Japan.

Even though Europe doesn't show signs of returning to the level of spending in 2000, the positive numbers are encouraging, given the region will account for 25% of the world's ad spending, Mr. Perriss said.

All told, the numbers show "relative optimism" for 2004, he said.

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