Financial Focus: S&P Cuts '04 Ad Rating
Television could be in for some uncertain seas in the rest of 2004, according to the report released Friday by Standard & Poor's.
"Broadcast TV ad demand continues to exhibit the lassitude of late 2003, with indications that network demand may only be a shade stronger than national spot," says Heather Goodchild, an analyst with the New York-based ratings company. She notes that on the way to the upfront negotiations, advertisers aren't too happy about the potential for another round of double-digit increases.
She predicts that total ad spending would rise only 5.9 percent on the strength of television's results leading up to the November election and the Olympics in late summer. That compares to the 5.2 percent growth registered last year.
"Despite the election and Olympics, which especially add to TV spending, advertising is recovering only slowly from its plunge into recession in 2001," Goodchild writes. That includes up and down auto sales and consumer confidence. She predicts only gradual improvement in much of the ad market.
The elections should contribute about $1.2 billion in advertising; presidential election spending may end up less on the TV networks because of the incumbent president and some "dissipation" of spending to local cable. The Olympics should account for less than the $1.3 billion for the last summer games, held in Sydney, because the Australian games will have more live events in prime time than Athens, Greece, where it is held.