Spending Forecast Projects 'Return to Normalcy'
"This market represents more a return to normalcy and reality than it does any type of sustained media economy recession," said Jack Myers, chief economist for Myers Reports. "Our projections reflect more positive marketplace conditions than negative. In fact, the 2001 market will be stronger than we had originally projected when we issued our first 2001 forecast one year ago."
Myers pointed out that his firm had been warning clients about a fourth quarter 2000 downturn since 1998. He said he still expects the market to be soft during the first half of 2001, "but we are projecting a nice recovery by the fourth quarter of 2001 that will build toward sustained media industry growth in 2002 and for several years thereafter." He said this growth will be fueled in large part by new interactive media technologies.
"To those accustomed to regular double-digit increases in spending, the 2001 market will feel like a recessionary one," Myers said. "But a more accurate description would be to call it 'slowing media inflation.'"
Myers added: "The first half of 2000 had gangbuster growth, leading many media organizations to have false hopes and expectations for the full year. However, our research among marketers identified several months ago that budgetary cutbacks were inevitable based on a post-election economic slump and concerns about consumer holiday spending. This is compounded by major set-backs in the auto industry and the virtual shut-down of dot-com spending. We have adjusted our 2001 forecasts upward, however, based on current research among marketers confirming their overall confidence in the long-term economy, a continued belief in the vitality of traditional media, and expectations that new media will become increasingly productive as direct marketing resources."
Myers forecasts continued strong growth for online media (+70%), reflecting a belief that advertisers and agencies increasingly will move online into the media mainstream. "We see more stability in the industry," Myers said. "The major online 'networks' and specialty players like AOL, Yahoo, MSN, About.com, as well as online sites of traditional media companies, will continue to grow and become standard components of major media buys."
Myers' other media spending forecasts for 2001 are newspaper (+2%), broadcast networks (+3.6%), national spot television (+2.5%), local spot television (+2%), broadcast syndication (+2.6%), radio (+9%), yellow pages (flat), consumer magazines (+7%), network cable (+14%), local/regional cable (+18%) and outdoor (+16%).
Myers also predicts a 3% gain for direct mail, 7% for consumer sales promotion