• The Hollywood Reporter, Monday, October 12, 2009 10:24 PM

Better-than-expected retail sales growth in September is boosting UBS' optimism in the U.S. advertising market outlook. The "modestly better retail environment may embolden ad buyers," says UBS analyst Michael Morris.

Retail advertising represented 14% of all U.S. ad spending in 2008, per TNS. Morris thinks that healthier retail sales this year will encourage retailers to increase advertising "to compete for share of still shaky demand." Consensus advertising estimates "mistakenly estimate future advertising using conservative growth rates off depressed 2009 bases." As result, those estimates remain too low, he says.

Last week, big retailers posted same-store sales figures for September, which rose 1.1%, per Retail Metrics. That represents the first gain in 13 months.

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