• by Jack Loechner , Staff Writer @mp_research, September 3, 2002

Newspaper and Broadcast Advertising Up, Magazines Down for the Count

A release from the Dow Jones Newswires by Brian Steinberg reports that U.S advertising in 2002 is expected to accelerate during the second half of the year, but will still fall short of the peak levels during the halcyon days of dot-com boom in 2000, according to a new study from Standard & Poor's.

The report written by David Wyss, the chief economist for the McGraw-Hill rating agency, calls for "modest growth" in ad revenue of almost 2.7% in 2002, followed by an increase of 5.1% in 2003. Despite the outlook, "it might be a while before the 2000 peak of $247 billion is regained," the report stated. Advertising revenue fell 6.5% in 2001, and has risen 2.3% for the first half of 2002. Mr. Wyss suggested that newspaper advertising, which reacts most quickly to changes in the economy, after dropping 9.8% in 2001, should recover to a 9% increase in 2002.

Broadcast and cable television have already seen a steadily increasing share of ad dollars. This year's political campaigns are expected to generate $640 million in ad spending, the report said, much less than a presidential election, but a good boost overall. Standard & Poor's sees TV ad spending up 3.5% for 2002, with total broadcast advertising up 4% for the year.

According to Standard & Poor's, magazine revenue dropped 10.3% last year, and is expected to be flat this year. A recovery in corporate profits in 2002 should help, but "profits are not expected to rebound to their 2000 levels until 2005, so magazine ad revenue will not fully recover for a few years."

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