Editorial - A holiday wish: growth in '03

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Two years ago we glumly noted here that "it's starting to feel like recession." One year ago we discussed the downturn, concluding: "The end isn't near." Thinking about 2003, we find ourselves talking about recovery. Aren't business cycles a wonderful invention?

To be sure, there are reasons enough to be skeptical about the prospects for any sustained advertising upturn. Consumer spending shows signs of slowing. We may soon be at war in Iraq. Companies, pressured to deliver profits, will look to cut costs-including marketing-if they cannot grow revenue. A weak recovery could morph into recession. Then there's also the absence of three factors that favored 2002 advertising: Olympics, elections and those easy comparisons with a depressed and difficult `01.

Yet by most measures, 2002 ad spending will come out better than expected. That gives reason for hope. Universal McCann's Robert J. Coen noted last week that U.S. ad spending in nine of the top 10 product categories increased in the first nine months of the year (drugs were down 1%). While only eight of 14 consumer-media categories showed increases, according to Taylor Nelson Sofres' CMR, big gains in broadcast boosted total spending in consumer media by nearly 4% through September.

Just a year ago, there were fears ad spending could fall-again-in 2002, marking the first two-year drop in spending since the Great Depression. The pessimists got it wrong. Now Advertising Age reporters note signs of optimism: Marketers are primed to get moving; agencies see more reviews and plan selective hiring in key posts; media people (especially in TV) see more activity.

Mr. Coen bullishly predicts 2003 U.S. ad spending will grow 5% to surpass the record set in 2000-a year with an overheated economy and irrational dot-com spending. We'll see about that. If it's hard to think of 2003 as a potential record breaker, moderate growth is plausible if the stars line up. The smart money should be prepared to spend a little more next year.

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