In his first official ad spending forecast since leaving the ad industry, Brian Wieser describes Madison Avenue’s near-term prospects in tepid terms that are the “new normal.” Wieser, who is now a senior research analyst with Wall Street’s Pivotal Research Group, previously, was the top ad industry forecaster at Interpublic, before joining targeted TV start-up Simulmedia. His forecasts carry a lot of sway in both advertising and financial neighborhoods.
The “bottom line,” writes Wieser, is that 2012 ad spending will grow only about 1.0% in the U.S., excluding the impact of political and Olympic related spending.
“Revenue growth almost solely arises from the introduction of new categories or emergence of new brands and that individual marketer budgets tend to hold constant over time,” he notes, adding, “We do not foresee any significant new categories/brands emerging in 2012.”
Consequently, Wieser projects that ad spending levels will “generally flatten” through mid-2012, with “weak growth in the periods that immediately follow.”
“In the shadow of August’s U.S. debt downgrade, budget-setters approached uncommitted advertising expenditures with hesitation, although not to the extent initiatives were halted outright (as occurred during the fourth quarter of 2008),” Wieser concludes, adding that soft macro-economic conditions are likely for the foreseeable future.
Wieser’s outlook comes days before the ad industry’s other leading forecasters will reveal their new forecasts for the remainder of 2011 and for 2012 next Monday at UBS’ annual Media Week conference in New York City. He predicts the impact on the media industry will be a continuing bifurcation of the marketplace of media “haves and have nots,” which is code for digital vs. traditional media.
“Simply put, in scarce times, marketers are concentrating their budgets among their primary medium (often network TV for large brands seeking awareness) and a secondary medium (often digital platforms for traditional brand marketers, who typically pursue engagement-based outcomes among a subset of the population who are aware of their brand attributes),” he writes. “In general, we expect to see national mass media continuing to gain share at the expense of local mass media. But direct media should continue to grow faster than mass media.”
Given that backdrop, Wieser predicts mobile advertising will grow fastest in 2012 (+37%) and paid search will “add the most in absolute dollars among all media” (up from $14.8 billion to $17.0 billion).