The Zenith forecast has network TV spending down 1.7%, spot TV down 1%, and newspapers flat through 2007. On the upside, Zenith forecasts a 3.5% growth in direct mail, 4.6% growth for consumer mags, 6% growth in cable TV, 6% growth in outdoor, and 29% growth in the Internet. Nontraditional out-of-home, including place-based video networks, are expected to grow 15%, and cinema advertising the same.
Looking back over the first quarter, Zenith found the top 10 ad categories grew just 0.5%, compared to the same period last year, with some industries posting substantial declines. Communications fell 7.4% in the first quarter, insurance and real estate were down 5%, and public transportation, hotels and resorts fell 4.9% Pharmaceuticals, on the other hand, grew 11.4%.
A more conservative forecast from TNS has overall advertising growing just 1.7%. Within this estimate, TNS expects network TV to grow 1.3%, spot TV to fall 5.5%, cable to rise 5.9% and the Internet to rise 16%.
Zenith blamed the sluggish ad growth on a general deceleration in the U.S. economy in the first quarter of 2007, largely due to the continuing slump in housing, a slowdown in government spending and a decline in business inventories. Summing up, its analysts noted that gross domestic product grew at an annual rate of 0.6% in the first quarter, just one-quarter of the 2.5% growth rate in the same period last year. On a more positive note, the consumer confidence index increased in April to 108 (compared to a base of 100 in 1988, when it was first measured), a 2.3% increase over April 2006. The unemployment rate held steady at 4.5% from April to May.