All agreed the expansion would have regional skews, with the U.S. growing faster than Europe, and with national advertising expanding faster than local domestically in 2004. The main beneficiaries, they said, would be the major national consumer media outlets, especially broadcast and cable network TV and syndication, though the pronounced rebound in online ad spending also appears to be sustainable as endemic online advertisers stabilize and as new marketers embrace that medium.
Greater uncertainties remain for print media, especially newspapers, said John Perriss, CEO of Zenith Optimedia Group, who along with Universal McCann Senior Vice President-Forecasting Bob Coen and Aegis Group CEO Douglas Flynn (see separate story in today's MediaDailyNews), issued their new outlooks during Wall Street conferences on Monday.
"Print media are in a long-term - indeed a 10-year decline," said Perriss, adding that print media likely would experience some growth in 2004 due to the overall expansion in a quadrennial year advertising marketplace, but that it would not be sustained as electronic media - especially television - continued to cut into print's market share.
Perriss said it also was unclear how sustainable the U.S. ad market's worldwide market share gains ultimately would be. He described the U.S. ad market growth as "cyclical" and highly dependent on the economic growth of the U.S., which he deemed to be flattening out relative to other regional economies, especially Asia-Pacific, where he said faster rates of advertising growth were likely.
He also described the Western European ad marketplace as being in a "sunset," meaning it likely would be the slowest growing of the major advertising regions.
Regarding 2004's quadrennial effect, Perriss estimated a "$1 billion-plus" of incremental ad spending would come from the U.S. Presidential campaign, $1 billion would come from Summer Olympic Games-related spending and $500 million would come from the Euro 2004 soccer tournament. Together, he said these incremental factors would represent 17 percent of the $15 billion in increased worldwide ad spending in 2004.
He implied that would be met by a hangover in 2005, especially for TV-based media outlets that tend to benefit disproportionately form quadrennial year boosts.
But Perriss said the biggest factor driving U.S. and global ad expansion in 2003, 2004 and beyond was the resumption of corporate profitability among the largest advertisers. Noting that the top 10 U.S. advertisers expanded their ad spending (+16 percent) at more than twice the rate (7 percent) as overall U.S. ad spending growth during the first half of 2003, Perriss claimed the U.S. ad rebound has been "driven almost entirely by big advertisers.
"I don't think it's categories we should be following. It's companies," he said, asserting that "companies rather than sectors" are a true indication of advertising vitality.
Meanwhile, Universal McCann's Coen unveiled surprising findings about a lagging and once key advertising category: dot-com advertisers that contributed so mightily to the advertising expansion that led up to the crash in 2001 when the dot-com bubble busted.
"As a group, they fueled a lot of that over-expansion," he said, noting that they are expanding once again. While the 2.3 percent dot-com ad expansion in 2003 was a modest one, it was the first increase since dot-com spending crashed in 2001.
"It looks like it is a sector that is re-expanding and it's another source of competition for traditional advertisers," said Coen.
Consumer Ad Spending By 'Dot-Com' Marketers
Year Ad Dollar Volume Change
2003 $2.200 billion +2.3%
2002 $2.150 billion -19.0%
2001 $2.662 billion -52.0%
2000 $5.597 billion +81.0%
1999 $3.086 billion +372.0%
1998 $0.654 billion +77.0%
Source: Universal McCann estimates.