• by David Goetzl , May 17, 2010

A new report suggests that the historical trend of ad spending increasing in line with GDP upticks may be fraying. A principal reason: newspapers and magazines, which have driven ad spending for so many decades, are now under much-publicized pressure. In 2011, Credit Suisse projects a 4.3% growth in nominal GDP. Traditionally, that would suggest a 5.3% growth in ad spending. Instead, the Wall Street firm expects only a 1.4% increase in ad spend next year -- far below the would-be GDP increase.

Expected healthy growth in the Internet, cable TV and outdoor is not expected to make up for "substantial declines" in newspapers.

"Though demand for newspaper and magazine content remains strong, increasing access to digital forms of this content continue to place pressure on their traditional advertising models," Credit Suisse wrote.

Ad spending has been known to come in at around 2% of GDP.

While it is not forecasting beyond 2011, Credit Suisse does not anticipate a return to ad-spending increases topping GDP ones; the wild cards are digital media and consumer control.

"While we may again witness GDP-like growth rates for traditional measured media types, we don't believe a return to substantial GDP out-performance is likely as audiences continue to fragment and concentrated advertising spend behind mass media does the same," Credit Suisse wrote.

Credit Suisse did acknowledge that the change in ad spending increases at a comparable level to GDP may not be related to marketers' cutting back spending, or ups and downs in particular media.

Instead, companies boosting spending in "below-the-line" initiatives, such as PR, event marketing and in-store promotions, have pulled money out of areas that economists might use to calculate ad spending. With those numbers "not fully captured by the leading monitors of media spend," results may be open to some interpretation.