Pivotal Research Group analyst Brian Wieser, perhaps the most respected economist tracking the ad business, revised his estimates for U.S. advertising growth this year by 1.8 points to 4.8%.
The revision, which follows Wieser’s original forecast of a 3.0% expansion in U.S. ad spending -- first made in November 2017 and reaffirmed in March -- represents and marginal acceleration from 2017’s 4.5% rate of growth.
“2017 was a stronger year than initially expected, and now having reviewed first quarter 2018 results, by all current indications 2018 is looking like it is growing faster than previously expected as well,” Wieser writes in a note sent to investors late Wednesday.
“Although rising levels of inflation are a factor, healthy personal consumption expenditures are evidently the main factor (as it is the single economic variable we have found most tightly correlated to advertising growth), rising this year at the fastest pace since the period preceding the global financial crisis.”
Wieser cited a variety of other factors for his bullish ad outlook, including his recent insight about billions of dollars of previously undetected digital “export advertising” coming out of China, although he said his current revision doesn’t even factor the incremental Chinese spending.
If factored into his current ad model, Wieser said it would “add another half a percentage point of growth in 2017 to the industry-wide figures we forecast,” meaning the actual U.S. ad market expansion might be more like 5.3%.
All of this year’s expansion is coming from national media (+7.9%), which is offsetting a 5.0% decline in local ad spending.