2001: Grimmer.
2002:
Better but still grim.

McCann's Coen's latest numbers on ad spending

By Elizabeth White


  
The nice thing about having the worst advertising year in half a century is that the next year is bound to be better.
    With 2002 just a month away, Universal McCann's Robert Coen, among the most-followed ad industry forecasters, is anticipating that total U.S. ad spending will increase 2.4 percent, to $239.3 billion dollars for the year.
    But growth will come off of a year that seems to have weakened as each month went by, leading forecasters like Coen and others to repeatedly slash earlier forecasts.
    Coen yesterday again lowered his ad spending forecast for 2001, projecting $233.7 billion in total U.S. ad spending, down 4.1 percent from 2000.
    As recently as June, Coen, senior vice president and director of forecasting at McCann, was predicting that the U.S. would experience the beginning of a rebound in the fourth quarter of 2001, to finish the year with 2.5 percent growth in ad spending over 2000.
    Last December, Coen predicted that 2001 would post a 5.8 percent increase in ad spending versus 2000.
    The main reason for the reversal in projections for 2001 is that the economy has gone into a deeper and wider slump than originally anticipated.
    And the terrorist attacks on Sept. 11, says Coen, were the final push that drove the U.S. and the global advertising economy into a recession.
    Coen now predicts that 2001 will mark a 3.9 percent decline in national advertising budgets compared to 2000, with a total of $142.4 billion for national advertisers.
    Globally, total ad growth should decrease by 1.7 percent in 2001 versus 2000, to 456.1 billion U.S. dollars.
    One of the biggest factors behind 2001’s decline came as no surprise to analysts--the disappearance of many of the dot.com companies.
    By 2000, the dot.com industry became nearly as large an advertising category as passenger cars, accounting for almost 10 percent of advertising in 2000 and over $5.5 billion in spending.
    Coen predicts that after the shakeout in 2000 and 2001, dot.coms won’t reemerge as a significant force for several more years.
    The absence of elections further hurt 2001 versus 2000, particularly for spot TV and radio. National advertising budgets for 2001 are projected to be down 20 percent in spot TV and down 18 percent in radio from 2000.
    Coen projects U.S. ad expenditures for radio to be down 3 percent and for all television to be down 5 percent from 2000.
    But things should improve in 2002 because of the Winter Olympics and the elections.
    Coen also says that advertisers learned from the recession and slow recovery in 1991-1992 and will begin spending again more quickly than after the last recession.
    In 2002, national advertising should increase 2.5 percent over 2001, to $145.9 billion dollars.
    Cable TV should enjoy the biggest boost, with 5.5 percent growth in national spending, while radio and magazines will continue to suffer with 1 percent declines.
    Local TV, thanks to the Olympics and the elections, will have the biggest increase, with 4 percent growth to $13.4 billion in 2002.
    Next year should be better globally as well, with total ad growth of 2.2 percent from 2001, to $466.1 billion U.S. dollars.
    Also released yesterday were ad spending forecasts by John Perriss, chief executive of Zenith Optimedia Group in London, and Jack Meyers, chief economist of the Meyers Reports, two other closely followed trackers of the ad economy.
    Perriss and Meyers were more pessimistic about 2001 and 2002 ad spending than Coen.
    Perriss is forecasting a 6 percent drop in ad spending for the U.S. in 2001, followed by a 1.5 percent decline in 2002, for two consecutive years of decreased spending.
    Myers is projecting a 6.8 percent decline for 2001 and a further drop of 5.7 percent in 2002.


2001 Budgets of National Advertisers


Media % Chg
over 2000
2001 Projections
$(000,000)
Four TV Networks - 3.5 $ 15,332
Spot TV -20.0 9,811
Cable TV + 4.0 11,385
Syndication TV + 2.5 3,186
Radio -18.0 3,648
Magazines -12.0 10,885
Newspapers - 8.0 6,650
Consumer Media Sub-Total - 8.1 60,897
Direct Mail + 3.5 46,152
Yellow Pages + 0.5 2,103
Internet - 5.0 4,115
Other National Media - 5.4 29,098
Total National - 3.9 142,365
Source: Universal McCann’s Insider’s Report

 

2001 Expenditures for all Advertisers


media % Chg
over 2000
2001 Projections
$(000,000)
Newspapers - 8.0 38,475
Television - 5.0 12,865
Radio - 3.0 14,400
Yellow Pages + 3.0 11,469
Other Local Media - 1.0 14,098
Total Local - 4.5 91,307
Total National Media - 3.9 142,365
GRAND TOTAL - 4.1 233,672
Source: Universal McCann’s Insider’s Report

 

The Outlook for 2002 – National Advertising


Media % Chg
over 2001
2002 Projections
$(000,000)
Four TV Networks + 3.5 15,870
Spot TV + 5.0 10,300
Cable TV + 5.5 12,010
Syndication TV + 4.0 3,315
Radio - 1.0 3,615
Magazines - 1.0 10,775
Newspapers 0.0 6,650
Consumer Media Sub-Total + 2.7 62,535
Direct Mail + 2.5 47,305
Yellow Pages + 1.5 2,135
Internet 0.0 4,115
Other National Media + 2.5 29,825
Total National + 2.5 145,915
Source: Universal McCann’s Insider’s Report

 

The Outlook for 2002 – All Advertisers


Media % Chg
over 2001
2002 Projections
$(000,000)
Local Newspapers + 1.5 39,055
Local TV + 4.0 13,380
Local Radio + 2.5 14,760
Local Yellow Pages + 1.0 11,585
Other Local Media + 3.7 14,620
Total Local + 2.3 93,400
Total National + 2.5 145,915
GRAND TOTAL + 2.4 239,315
Source: Universal McCann’s Insider’s Report

December 4, 2001 © 2001 Media Life


-Elizabeth White is a staff writer for Media Life.


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