Forecast: Things are looking up for 2012

There’s been very little good news regarding the U.S. media economy the past few months, with disappointing ad spending growth during second quarter and frustration over slow job growth and the continued European debt crisis spooking some advertisers.

But now, finally, one forecaster is feeling a bit more optimistic.

Today Zenith Optimedia, the London-based agency, issued its latest forecast for U.S. ad spending.

It predicts that spending will grow 4.3 percent, up from its projection over the summer for 3.6 percent growth this year.

It’s the first time in months a major forecaster has lifted their outlook, after several rounds of declining predictions.

Still, Zenith Optimedia is hardly cheery about the overall economic prospects for this year.

“While we are past the worst of the economic downturn, growth remains slow,” notes the report.

“Key economic indicators that increased in 2011 have decelerated, including consumer spending (and therefore GDP) and job growth.”

But there are good reasons for rising optimism over the media economy.

The report notes that cable TV continues to gain, partly at the expense of broadcast, as it offers more and more quality programming, including scripted series and sports programs.

And mobile has given a boost not only to the online sector but also to a format that has been struggling.

“Print will suffer on account of digital media, but mobile devices have given new life to magazines; as smartphones, tablets and e-readers gain traction, we expect accelerated adoption of these devices,” the report says.

Spot TV will be a major factor in this year’s stronger-than-expected growth.

The category will rise 12 percent in 2012, up smartly from Zenith’s earlier forecast of 8 percent growth.

“The 2012 spot TV marketplace is extremely volatile with the presidential election at hand,” states the report.

“Primaries will be pivotal for candidates and the introduction of the super PAC [political action committee] has brought political spending to new heights. This category is not classified as ‘political’ on a station’s rate card and pays top dollar to be on air.”

Zenith says that political spot spending is pacing 90 percent ahead of the 2010 election season. Analysts have predicted that nearly $3 billion will be spent on spot television by political advertisers this year.

Unlike several other forecasters, Zenith is optimistic about radio spending as well. It will benefit to a small degree from an increase in political spending and by gaining advertisers who don’t want their ads to get lost in the flood of political ads clutter local television right now.

But the report also notes that retailers are making a big push on radio, including those advertising seasonal products and automobiles.

Two other traditional media, newspapers and magazines, will continue to slip, down 8 percent and 3 percent, respectively, this year.

But Zenith predicts that the huge gain in tablet users will start to give magazines a boost in coming years.

“With over 30 percent of current users accessing magazine content on their tablets, this represents an opportunity for publishers to increase sales through the digital newsstand,” says the report.

Tags: ad revenue, ad spending, ad spending forecasts, CINEMA, forecasts, newspapers, political, political ad spending, radio ad spending, spot TV, Total Internet, Total Magazines, Total Outdoor, Total Radio, u.s. ad spending, zenith optimedia