Pivotal Research Sharply Upgrades 2014 U.S. Ad Growth Forecast

Pivotal Research Group senior analyst Brian Wieser is sharply increasing his U.S. ad growth estimate for 2014 -- to 4% from the 2.5% he forecast at the end of last year. 

Wieser’s upgrade follows the Interactive Advertising Bureau’s release earlier in the week of first-quarter online spending figures, which showed a 19% year-over-year gain.

Overall ad growth in the first quarter, Wieser calculates, was 4.4% -- up a full percentage point over the fourth quarter 2013 rate of 3.4%.

“With yesterday’s release of figures from the IAB for first quarter online advertising building on the rest of the industry’s figures from the same period, we can conclude that the year ahead should be increasingly rosy,” Wieser wrote in a report issued Friday.  

“While many traditional media continued to decline, local and national television continued to hold up with low- to mid-single digit growth,” Wiser reported. “By itself, digital advertising’s gains of $1.8 billion almost matched the entire industry’s $1.9 billion of growth during the quarter.

“We could alternately suggest that television advertising’s $1.6 billion year-over-year gain (excluding the Olympics and political advertising) was equally critical in driving the industry’s growth, as most other traditional media tends to serve as the source of budget shifts into digital advertising.”

Wieser also said that the amount of money in the ad economy is growing largely from so-called “Web endemics,” such as e-commerce based marketers, app developers and digital content distributors. He postulates that such entities may be “driving half of Web-based advertising’s gains.”

E-commerce, app installs and digital content distributors “probably won’t get much focus at the [Cannes] Lions this year, although digital advertising in a broader context will certainly be a central element of the Festival along with the traditional focus on television commercials. And why not? These media provide the life-blood of much of the industry presently, and drive much of the industry’s growth at the present time. But so long as the industry continues to grow one way or another, the industry can celebrate, and the rose can continue to flow.”

"Money with arrow going up" photo from Shutterstock.

Recommend (2) Print RSS