Ad spending outlook: 2013 is promising

Ad spending will be strong throughout the remainder of the year with internet dollars growing like gangbusters and stronger demand from retail and auto advertisers.

But a strong 2012 was already a given because of the $3 billion in political and Olympic dollars being spent.

The real measure of the economic recovery will be seen in how 2013 shapes, and right now it's looking very promising.

Next year could be the year when the ad economy finally turns around for good, after a number of fits and starts since the recession began in 2008.

In fact, one forecaster, London-based ZenithOptimedia, predicts that ad spending growth will actually be stronger next year than this year.

It forecasts that ad spending will grow 3.6 percent this year, including political and Olympic dollars, and 3.8 percent next year, despite the lack of a major election or the Games.

That's a real vote of confidence considering last year, the last non-election, non-Olympic year, saw a gain of only 1.6 percent.

"As we move further past the recession, we expect increases of 3.8 percent in 2013 and 4.7 percent in 2014, largely on account of increases in internet spending, primarily mobile and social networking," says the ZenithOptimedia report.

"While we are past the worst of the economic downturn, economic growth remains slow."

Growth is slow, but there's clearly been some improvement, spurring greater confidence from advertisers, who pull back on spending when their confidence flags.

Unemployment is down to 8.2 percent. Auto sales are on pace for their best year since 2008, signaling consumer confidence in the economy. The long-lagging housing market is perking up, with builders saying they're more optimistic than they've been in five years.

And the stock market got off to a strong start to 2012, though it's cooled a bit over the past month.

Of course, as we've seen over recent years, anything could happen in the next six months to throw off the recovery. But if it continues apace, next year should be pretty good for the media economy.

Digital will be the catalyst. Total online spending will grow 18.3 percent next year, the strongest growth rate in at least four years, to $36.2 billion.

Only television, at $63.1 billion, will contribute more to the media economy, and some web subcategories are growing at an absurdly high rate.

Mobile will soar 51 percent, and social media will be up 35 percent. Video/rich media ads will grow by 28 percent, and between the three categories they will account for a third of all new media spending.

The other major growth area next year will be cable television. Sports dollars continue to migrate from broadcast to cable, and the medium is more in demand than ever, both as a complement to traditional broadcast buys and as a cheaper alternative to broadcast.

The strength of those two media will go a long way toward making up for the continued softness of newspapers and magazines, both of which will continue to see declines through 2014.
 

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