Mad Ave. To Wall St.: Things Are Looking Up, Especially For Web, Cable TV

A survey of big media buyers indicates that their second half ad spending plans have improved markedly from the first half of the year, and that online media and cable TV are the major beneficiaries. The findings, based on a poll of 20 agency media executives representing $1.6 billion in annual ad spending that was conducted by the equities research team at J.P. Morgan, projects the pattern of improvement, and the flow of ad spending share to online and cable TV, will likely continue through 2010.

 

"The biggest winners in market share shifts have been cable and the Internet," the Wall Street analysts wrote. "Although ad spend on broadcast network TV and cable TV still dominate other forms of advertising at 52.9% of budgets, our media buyers/planners expect the most growth in cable and Internet spend. Internet ad spend (including search, display, email, and other forms) in 2010 is expected to account for 29.0% of budgets, respectively, vs. a 25.8% share in 2009. Cable ad spend is also expected to see upside with ad buyers/planners expecting to spend 26.2% of their budget there in 2010 vs. 24.5% in 2009.

The findings of the J.P. Morgan research are consistent with a study of advertisers, media planners and buyers that subscribe to MediaPost publications (Online Media Daily, Sept. 10). That study, the "2010 Media Planning Intelligence Study," which was conducted jointly by the Center for Media Research and Insight Express, found that advertising and media buying executives plan to dramatically increase their share of ad spending in digital media, especially rapidly emerging forms such as social networks during 2010.

Based on the input it has received from agencies, J.P. Morgan also expects share shifts toward online media and cable TV to continue through 2010.

"Based on current ad spend trends and preliminary talks with marketers, 40% of our survey respondents estimated 2010 ad spend would be roughly flat with 2009, while 25% thought ad spend would be up 5-9% year-over-year in 2010 and another 25% thought it would be up 10-14% year-over-year. Only 10% of respondents thought that ad spend would further decline in 2010 on a year-over-year basis," the report says, adding that, "participants indicated that the greatest gains in market share of total ad dollars are in cable TV and Internet advertising."

Specifically, the J.P. Morgan study projects that Internet ad spending (including search, display, email, and other forms) in 2010 is expected to account for 29.0% of budgets vs. a 25.8% share in 2009.

Cable TV ad spending, meanwhile, also is expected to see upside with media buyers and planners projecting that 26.2% of their budgets will be placed on that medium in 2010 vs. 24.5% in 2009.

"Many respondents noted in comments that TV remains the dominant media, but print spend continues to decline with the difference going to digital and some cable TV," the analysts noted.

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