Slower ad growth in '97

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Ad spending forecaster Robert Coen predicted total U.S. ad spending will grow 5.6% in 1997, to $183 billion. The prediction is lower than estimated '96 growth of 7.6% but is still fairly optimistic because '96 benefited from an election and the Olympics, noted Mr. Coen, senior VP of McCann-Erickson. However, the 5.6% forecast for 1997 would represent the smallest gain since 1993. Mr. Coen, speaking at the annual PaineWebber media conference today, said he expects ad spending to ``moderately exceed'' growth in gross domestic product.

In '96, the fastest ad growing categories include healthcare, soft drinks and financial services. Advertising for food, household cleaners, appliances and beer has declined. On a worldwide basis, Mr. Coen anticipates a 5.9% increase in ad spending next year, to $414 billion, down from a 7.1% jump this year.

Daily newspaper revenues are expected to continue growing, albeit at a slightly slower pace through 1998, predicted Miles Groves, VP, chief economist of the Newspaper Association of America in another presentation at the PaineWebber conference. Ad dollar growth is expected to be between 5.8% and 6.4% over the next two years while circulation revenues are expected to show about a 3% growth over the same period, said Mr. Groves. Total daily newspaper revenue this year is predicted to rise 5.69% to $48.4 billion. Next year, fueled by a 4.89% rise in revenues, the daily newspaper industry is projected to shatter the $50 billion barrier for the first time, with revenues of $50.79 billion.

TV broadcasters in 1996 will report a revenue gain of 12% over 1995--the first time since 1984 that there has been a double-digit gain for the industry, according to David Poltrack, executive VP-planning and research for CBS Television Network. While acknowledging declines in broadcast viewership, he said part of the blame rests with research problems at Nielson, which has been trying to enhance is audience measurement techniques. "Clearing up this measurement issue is a major priority for each of the networks. Hopefully, it is a priority for Nielsen as well," he said.

Copyright December 1996, Crain Communications Inc.

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