Full-year 2002 advertising expenditures will rise 2 percent over last year for network television, 1.1 percent for cable television and 2.5 percent for spot television, according to a new forecast from CMR, the Taylor Nelson Sofres company that specializes in tracking advertising and marketing data.
Those increases, it should be noted, come after the worst year for television advertising in at least a decade, and the overall TV advertising marketplace will remain depressed in relation to 2000, advertising’s banner millennium year.
The battered television syndication market will grow in 2002 by just 1.1 percent over last year, according to the CMR forecast. The leading advertising medium in terms of percentage gain in 2002 will be the Internet, expected to grow by 8.8 percent.
By comparison, all advertising media-including radio, newspapers and magazines-are expected to rise just 1.5 percent, up to an aggregate $96.1 billion from an estimated $94.6 billion in 2001, according to CMR.
CMR estimates that aggregate advertising expenditures for all media in 2001 were down 9.4 percent, to $94.6 billion from $104.5 billion overall in 2000, making it the worst year for ad spending since the recession of 1990-91. In television, for example, the all-important 2001 upfront was down double-digits in most segments (around 17 percent for both broadcast and cable) from the previous upfront in that bountiful millennium and presidential-election year.
Rebound from the worst depths of 2001 should begin in the third quarter, according to the CMR forecast, which pins much of its expectations for improvement at the local media level to the blizzard of political advertising that will precede the November midterm elections.
At this point, the CMR prognostication is far from the only one out there, and the various forecasts do disagree-and sometimes drastically-by billions of dollars. The general range of predictions for 2002 TV ad spending compared to 2001 is from down 6 percent to up 5 percent. There is disagreement as well about the first quarter, which is off to an apparent strong start, paced by the Winter Olympics and the Super Bowl.
“The first quarter is dreadful,” said media analyst Christopher Dixon, managing director, UBS Warburg. “The good news is that the Olympics and the Super Bowl are going to make the overall numbers look perhaps better than they otherwise might be, but we have yet to see a significant turn in the overall advertising trends.” One sign of a weak market, Mr. Dixon said, is that scatter ad buys are coming much closer to air dates.
Like CMR, the view from UBS is that improvement will not occur before the second half of the year. “It all comes down to when you think the economy is going to turn,” said Mr. Dixon. “Our sense is that it’s going to be heavily fueled in the back half.”
“The back half of the year is where the improvement begins,” agreed Bruce Lefkowitz, executive VP, Fox Cable Networks Sales. “It’s a return to normalcy. We’re not going to be talking about a 20 percent decrease in dollars-we’re not talking about a 20 percent increase in dollars, but I think that you’re looking at a positive marketplace, dollar volume up.”
The view from Fox Cable is that, “Projecting out into the ’02-’03 upfront, I think we’ll see growth of 5 [percent] to 8 [percent],” Mr. Lefkowitz said.
Under every positive scenario, simply to reach an improvement over the dismal year just ended, the scatter market will have to grow significantly, said Larry Goodman, president, CNN sales and marketing. That’s particularly true in the ad-supported cable industry, where scatter revenues almost equal those from the upfront, he said.