Forecasts: U.S. will see modest boost in ad spending

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Advertising spending will grow moderately in the U.S. next year, pushed along by TV spending among major marketers, and the U.S. will help push worldwide spending numbers upward, according to twin forecasts released at the UBS Warburg 30th Annual Media Week conference.

Robert J. Coen, exec VP-director of forecasting for Interpublic Group of Cos.' Universal McCann, estimated U.S. ad spending in 2003 will reach $249.3 billion, up 5% over 2002, as big advertisers increase spending and put postponed product launches back on track. (See chart, P. 4.)

"The correction seems to have been accomplished and completed and we're on our way now," Mr. Coen said. He projected national media will grow 5.3% in 2003, while local media will grow 4.5% as classified begins to recover.

world totals

Increased U.S. spending will push world totals to $320.7 billion globally, up 2.9% including the effects of inflation, according to a forecast by ZenithOptimedia, a joint venture of Publicis Groupe and Cordiant Communications Group. Spending on TV and spending by U.S. advertisers will set the pace worldwide, said Zenith Chief Executive John Perriss.

North America-including the U.S. and Canada (which had strong ad growth in 2002)-makes up 48% of the world's ad spending and drives world totals, according to Zenith. Asia Pacific will grow 3.9% including inflation, in spite of continued weakness in the Japanese market, while Europe will grow only 0.5%, mainly due to the weakness in the U.K. and German economies.

But Mr. Perriss cautioned that the U.S. ad market saw $2.6 billion in "exceptional" spending in 2002, mainly political advertising. In 2003, there will be no election to stir spending and consumer demand may slow down as economic reality begins catching up to consumers, many of whom have drawn money from their home equity to support their spending habits, he said.

"The consumer has defied the gloom and doom and kept spending. ... I question how long that's a sustainable phenomena," he said.

Separately, media analyst Jack Myers projected spending in U.S. media, excluding direct mail, will increase 2.8% in 2003 and 4.1% in 2004. He forecast that TV will continue to show strong growth through next year, while print will benefit from easier comparisons to 2002. Mr. Myers warned local TV and radio will be affected by the absence of political advertising, which added nearly $1 billion in ad revenue this year, but indicated it will be offset by growth in automotive, entertainment, wireless and retail ads.

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