Yet more signs of optimism as 2012 closes
Latest forecast predicts fourth quarter will be strong
October 4, 2012
Second quarter was disappointing for the U.S. ad economy, and third quarter wasn’t any better.
But there’s a growing sense among forecasters that things will get better as year’s end nears.
Earlier this week ZenithOptimedia released a revised forecast calling for greater growth than it had expected in July.
And yesterday Nomura released a report predicting that ad spending during fourth quarter will show better gains despite the struggles during third quarter.
“Third quarter will be weak, blurred by Olympics and political spend that is being pushed out closer to the election, but fourth is shaping up to be a strong quarter,” says the report.
On television, the largest ad spending category, there are several things to keep an eye on.
The report notes that several cable network parent companies, including Viacom, Scripps and Discovery, voiced optimism about fourth-quarter ad spending after a slow third quarter, when lots of dollars funneled to NBCUniversal’s Olympics.
All reported scatter pricing up high single digit to low double digit percentages, and they said demand is up as the end of the year approaches, with auto and financial especially strong.
But Nomura also notes that broadcast ratings continue to decline, which will impact advertising.
Of particular concern for broadcast is the addition this season of a Thursday night football game on NFL Network, which in previous years did not start until November.
That could draw viewers away from the traditionally strong Thursday lineups on the Big Four.
“No one is raising [advertising] estimates, but cable sounds better than broadcast,” says the report.
The report also notes that political spending on spot TV was weaker than expected during third quarter. The presidential candidates have pulled back spending in a few locales that are no longer considered swing states, such as Pennsylvania, and Mitt Romney did not advertise during the Democratic National Convention.
Still, there are signs that political spending is picking up for fourth quarter.
One more thing expected to help drive overall ad spending as the year winds down is the aforementioned automotive category.
Numbers out this week suggest that strong ad spending by manufacturers and dealers will continue through year’s end.
September automotive sales were the best in four years, at an annualized rate of 14.94 million.
Strong car sales usually lead to increased advertising, as manufacturers push their product the hardest when they believe people are in the mood to buy.
During second quarter, auto ad spending was up 7.7 percent, according to Kantar Media, more than any other top-10 ad category.
The Japanese manufacturers saw the biggest gains in car sales during September, more than a year after the earthquake and tsunami in Japan wiped out their supplies and led to lower 2011 sales.
Toyota increased 42 percent last month and Honda improved by 31 percent.
Chrysler, meanwhile, posted its 30th straight month of sales growth, up 12 percent.
Tags: ad spending, advertising, auto, automotive, broadcast, cable, fourth quarter, fourth quarter ad spending, local ad spending, national ad spending, nomura, political, political ad spending, political spending, third quarter ad spending
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