Road To Ad Recovery Hits Some Speed Bumps

Just when it looked like Madison Avenue was firmly on the road to recovery, some new speed bumps are suddenly popping up.

B-to-B ad spending, considered the critical lagging indictor of an advertising rebound, plummeted again in July after expanding in June, its first real increase since the B-to-B ad page erosion began in November 2000. Ad pages fell 9.7% in July and total ad dollars declined 7.9% from year ago levels, according to estimates released Friday by American Business Media.

Despite the setback and a warning that August might also show lackluster results, ABM president-CEO Gordon Hughes said the trade group stood by its recent projection that ad pages would grow 1 percent to 2 percent over 2002 and overall ad dollars would expand by 3 percent. "We're also estimating single digit growth in early 2004," he said.

July/Year-To-Date B2B Ad Spending


July '03 Change Year-To-Date Change
Ad Pages: 42,168 -9.7% 334,093 -4.1%
Ad Dollars*: $613.9 -7.9% $4,927.6 NC
Ad $/Page: $14,558 +1.9% $14,750 +4.2%

Source: Business Information Network, a venture of American Business Media and TNS Media Intelligence/CMR. *In millions.

The turnabout in B-to-B ad spending, when combined with other recent developments, paints a decidedly weaker view of a U.S. ad expansion than have been suggested by leading ad forecasters such as Universal McCann and Zenith Optimedia.

Among other things, a survey of nearly 500 industry executives conducted by MediaPost and InsightExpress in mid-September shows overall ad spending rising at only about half their projected rates. Moreover, with the exception of network TV, which is sure to benefit from a strong 2003-04 upfront and a boost from NBC's carriage of the 2004 Olympic Games, no other major traditional media are projected to see a rise in respondents' ad budgets during 2004. The primary growth, they said, would be to direct response advertising or non-traditional media like various forms of Internet marketing.

While the view of these individual respondents may not reflect the impact on overall industry spending, it indicates that budgets may be shifting more than others have been suggesting.

Next story loading loading..