While 2004 won't achieve the 11.3 percent rate of growth achieved by the U.S. ad industry in 2000, the Merrill Lynch researchers nonetheless expect it to grow at rates that are much more consistent with historical patterns that tend to match the expansion of the U.S. economy. In 2004, the securities firm expects U.S. ad spending to grow 6.6 percent, an improvement of more than half a point from the 6.0 percent rate of growth it previously predicted. Worldwide ad spending is now expected to grow 5.5 percent, indicating the U.S. will continue to grow its share of global ad spending.
Despite the healthy rate of expansion, the Wall Street analysts said they nonetheless are disappointed that "in a year with strong political spending and a Summer Olympics, that advertising isn't outperforming" overall economic growth. "Call us greedy," wrote Fine.
The Wall Street outlook still isn't as robust as some Madison Avenue prognosticators had been predicting. The ad industry's official scorekeeper, Universal McCann Senior Vice President-Director of Forecasting Bob Coen, is set to announce his midyear update this morning and also is expected to revise his ad outlook upward. In December 2003, Coen predicted U.S. ad spending would rise 6.9 percent.
U.S., Worldwide Ad Growth
2001 -7.8% -8.2%
2002 +1.9% +1.2%
2003 +3.5% +2.4%
2004 +6.6% +5.5%
2005 +5.5% +5.0%
Source: Merrill Lynch. Estimates include measured media and exclude direct mail.