A brighter outlook for the media economy
Forecast: Ad spending will rise 1.8 percent this year
September 4, 2013
Boosted by an unexpectedly strong first half for national advertising, the media economy is picking up some steam.
A new forecast from Pivotal Research Group raises the outlook for 2013 ad spending, following months of mixed news about the U.S. economy.
Ad spending will grow at a rate of 1.8 percent this year, up from a projection of 1.4 percent in April. That’s also ahead of the 1.2 percent growth rate for 2012.
“The short-term prognosis for advertising is better than we previously forecast,” says Brian Wieser, senior research analyst at Pivotal, in the report.
He notes that national advertising has been spurred by growth in digital, which will increase by 19.2 percent this year, compared to an earlier forecast of 14.6 percent.
Google’s display advertising and Facebook drove much of that growth. Wieser says Yahoo and AOL, among other premium publishers, are seeing less-impressive results this year.
Total national advertising was up 5.8 percent during second quarter, compared with Pivotal’s April forecast of 2.3 percent.
That was also way up from first quarter, when national grew 1.8 percent.
“Much of this was due to revised estimates of historical data for the year-ago period, but the quarter was strong, however defined, for many types of media and for many media owners,” Wieser notes in the report.
Wieser also sees a brighter outlook for national TV and cable for the full year, bumping up his forecast to growth of 3.1 percent for broadcast (up from 2.7 percent) and 5.5 percent for cable (up from 5.3 percent).
One area where growth remains solid but slowing is paid search. Wieser says it was up 26 percent in first quarter of 2012 but has fallen every quarter since, down to 11 percent in second quarter of this year.
One reason may be that Facebook, which has seen gains in its Promoted Posts for small businesses, is seeing gains at the expense of Google, the longtime search leader.
“This is not to say that Google isn’t still able to grow: in fact, we believe that they are driving much of the growth in digital display advertising with their Google Display Network in particular. However, the margin profile of display ad products will be worse for Google than if it generated revenue from paid search instead,” Wieser writes.
While Pivotal is more optimistic about this year’s ad spending, it’s less so for coming years. It notes that some of that is sparked by the recent agency consolidation that is expected to give an advantage in pricing to media buyers.
“We are slightly reducing our expectations for following years, largely because of the improved negotiating positions we expect to see with large nationally oriented media agencies in the aftermath of further industry consolidation,” Wieser says.
“At this time we think the impact will be modest, but nonetheless real, and forecast growth rates to at levels that are around 0.4 percent lower each year than we previously expected, with a slightly higher impact on national television.”
What clients need to know about out of home
‘Big Brother’ paces CBS to another Sunday win
This week’s top movies, songs and books
Readers: Rupert Murdoch’s still got it
NBC’s ‘Mysteries of Laura’: Iffy outlook
Buzzfeed dumps writer in plagiarism dustup
Self magazine slashes eight employees
Why Millennials are the way they are
Study: 50 percent don’t want mobiles being tracked
‘Seinfeld’ on Netflix: Not just yada, yada
‘World News’ wins third week in a row in demo
Pizza delivered by a Mutant Ninja Turtle
So, what’s the future for print magazines?
- Tom Buontempo becomes president at Attention
- Fareed Zakaria becomes a contributing editor at The Atlantic
- Jason Chupick becomes PR director at Hearst Magazines Digital
- Terry Duffy rises to group publisher at Palm Beach Media Group
- Lars Anderson becomes special contributor at Alabama Media Group
- Anne Kensington-Lott becomes VP of Hispanic at McGavren Guild Media
- Mark Gall becomes CRO at DEFY Media
- Stephanie Mitchko-Beale becomes CTO at Cross MediaWorks
- Barry McMullin becomes SVP of sales at WWE
- Mary Louise Parker joins NBC's 'The Blacklist'
This week’s top movies, songs and books
This week’s daypart ratings
This week’s cable ratings
This week’s broadcast ratings
This month’s new media traffic data
This week’s younger viewer ratings
Mobile media planner opening in San Francisco
Senior media planner/buyer wanted in Cleveland
Digital media planner position in Austin
Media planning supervisor job in New York
Digital media planner opening in Chicago