Outdoor, B-to-B Report Soft Results, Add To Mixed Ad Signals

by Joe Mandese, Jun 21, 2005, 7:30 AM

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More mixed signals emerged for the near-term advertising economy from two major media - outdoor and business-to-business media - on Monday. Ad spending on outdoor media rose only 2.9 percent during the first quarter of 2005, a much more moderate rate of growth than some had estimated or projected for the medium, which is going through a renaissance in advertising circles for a variety of reasons. B-to-b media, meanwhile, continued to erode in April, according to estimates released by American Business Media, as business marketers abandoned ad pages in the traditional business press in favor of new media or other marketing options. The slowdown reflects an overall mediocre growth reported recently by a variety of broadcast and print media companies, and comes as news about the 2005-06 network upfront ad sales marketplace appears to have turned from robust to soft.

On Monday, a number of trade publications reported that the network prime-time upfront is ending up lower than had been expected, due mainly to lackluster sales by NBC. While NBC has yet to officially confirm its upfront sales performance, Monday's reports indicated it is down $900 million to $1 billion from its 2004-05 upfront prime-time sales. MDN first reported these projections on Friday.

While lagging data, the first quarter ad performance of the outdoor media industry does not cast an auspicious light on the ad economy. Outdoor ad spending was expected to surge as the industry embraces new, more accountable measurement methods, as well as new digital media capabilities, and as marketers begin backing away from TV. While a few outdoor ad categories due indeed seem to be expanding at double-digit rates, mainly the red hot telecommunications sector (+28 percent), as well as insurance/real estate (+11 percent) and media/advertising (+12 percent), some important ones like automotive (-6 percent) and travel (-4 percent) were down.

The same has been true for the business press, which saw ad pages erode another 3 percent in April, bringing the year-to-date tally down 1 percent from the first four months of 2004.

The estimates, which come from the ABM's Business Information Network database, shows that b-to-b ad revenues actually grew 5 percent in April and 6 percent year-to-date, suggesting some advertising price inflation is also taking place in the business press, which may be another factor driving business marketers to alternatives.

Not all media have been mired in the advertising slowdown. Online ad spending continues to soar, and both the Hispanic TV and cable TV markets have been growing at double-digit rates.

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