Spending to rise by 4.3% this year

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Ad spending will rise 4.3% in the U.S. this year, to $124.7 million, thanks to growth in Hispanic media, an early start to the 2004 presidential campaign and an acceptance of uncertainty by advertisers, according to a forecast from TNS Media Intelligence/CMR unveiled at AdWatch: Outlook 2003.

The outlook is a marked improvement over a 3.3% forecast issued by CMR in January. The forecast was raised after the first quarter came in higher than the initial 4.2% forecast, the network TV upfront marketplace outperformed even the networks' expectations and estimates for the gross national product were upgraded, said Steven Fredericks, president-CEO, CMR.

Advertisers have increased their spending on campaigns and product launches, even as the Iraq war threatened activity in the first half, Mr. Fredericks said. He noted CMR's tallies found spending for the four weeks of the war ran $70 million ahead of the same time last year.

The Iraq war had far less of an impact than the Sept. 11 attacks, when TV lost out on $313 million in revenue in one week. The Iraq war inspired a "life goes on" mentality among advertisers and audiences, Mr. Fredericks said.

"For our industry today, advertising in uncertain times is the new norm and we're better equipped to deal with it," than in the aftermath of the Sept. 11 attacks, Mr. Fredericks said. Seven of the top 10 advertisers showed spending growth in the first quarter of 2003 and spending on new brand launches was up 16% during the quarter, led by new movie and video releases and new auto models.

Spanish TV growth

While all media are expected to post year-over-year increases, Spanish-language TV will see the sharpest growth, with a 16.9% increase. Advertisers are increasing spending in Hispanic media in recognition of its strong growth and buying power, Mr. Fredericks said. The top 10 ad spenders increased Hispanic media spending by 34% in 2002, compared to a 6% overall increase during the same period.

Election spending will also help pump up totals for 2003, in spite it being an off year for major races, Mr. Fredericks said. He noted three hotly contested gubernatorial elections and more than 40 local races will spur spending, and Democratic presidential candidates are expected to begin primary-season advertising this summer. Political spending continues to grow, even in off years, Mr. Fredericks said, adding that political spending will top $250 million this year, more than the midterm election year of 1998. Another source of spending will be in issue advocacy advertising, such as health care reform and energy policy. (Read more: AdAge.com QwikFIND aao79a)

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