• by Richard Whitman , Columnist, May 16, 2018

Pivotal Research analyst Brian Wieser has just updated his 2018 ad growth projection — and he’s a bit more optimistic, now that he’s analyzed the first-quarter numbers.

Wieser now believes that underlying growth -- which excludes Olympics and political dollars — will reach 4.8% this year, surpassing 2017 growth of 4.5%. Underlying growth in the first quarter was 5.5%, per his analysis.

“2017 was a stronger year than initially expected and now having reviewed Q1 results, by all current indications, 2018 is looking like it is growing faster than previously expected as well,” Wieser wrote in a note to investors late Wednesday.

The main factor driving improved expectations, he said, was healthy personal consumption expenditures, which he noted were rising this year “at the fastest pace since the period preceding the global financial crisis.”

Also, industrial production is pacing at levels seen earlier in the decade. “The relationship between the two factors and advertising is simple,” Wieser wrote. ”One reflects consumers buying goods and the other reflects manufacturers producing goods, both of which coincide with advertising expenditures.”

He reiterated that an added tailwind is a surprising amount of spending coming out of China. Emerging independent direct-to-consumer marketers, particularly in the apparel and packaged-goods sectors, are also contributing to ad growth this year.  

Digital is expected to grow by nearly 20% this year and television by about 2%.

Growth should continue beyond 2018, Wieser currently believes, although he sees it tapering toward 3.5% in subsequent years.