• by Wayne Friedman , September 9, 2005

A cautious Television Bureau of Advertising is estimating that 2006--a political and Olympic advertising year--will see TV spot advertising revenues climb between 6.1 percent and 7.9 percent over 2005--at a lower rate than for other political/Olympic years.

Even-numbered years, such as 2006, have an Olympics broadcast--this time, the Winter Olympics from Turin, Italy--and heavy political advertising revenues. The Television Bureau of Advertising (TVB) estimate would be down from the actual gains of the last political/Olympic year--2004--which saw TV spot revenue climb 10.1 percent. Other Olympic years also saw double-digit increases--11.9 percent in 2002, and 11.3 percent in 2000.

The TVB is guarded because of wild cards, including the effects of Hurricane Katrina, oil prices on consumer spending, automotive and political categories, new technologies, and measurement and accountability issues--specifically, the effect of Nielsen's new Local People Meters on broadcast stations.

"The truth is that it's an uncertain environment," said Chris Rohrs, president of the Television Bureau of Advertising (TVB).

One of the biggest factors for next year--2006--is political advertising, which history has shown to routinely climb over previous political years. With all the uncertain factors, the TVB is hedging, saying it will only grow by $1.2 billion. This would be down against a $1.6 billion number achieved in 2004.

But unofficially, Rohrs' personal point of view is a bit different: "To be honest, I believe it will be up."

Breaking down the TV ad environment further in 2006, TVB says that the national broadcast spot business will see the biggest gains--climbing in a range from 10.5 percent to 11.7 percent. Next is local cable, up 6 percent to 8 percent. In third place is network cable, at 4 percent to 6 percent increases. Broadcast network will have the fourth biggest gains at 3 percent to 5 percent. Then comes local broadcast spot, at 2.9 percent to 5.1 percent. Syndication is in sixth, at 2.5 percent to 4 percent.

Local cable is a main competitor of broadcast stations. Although the TVB--which is the advertising association for broadcast stations--predicts better growth for cable than broadcast, cable will grow more slowly than in previous years.

"Most of the Wall Street firms see cable as rapidly maturing business," says Rohrs. "We also think cable is rapidly moving to a slower growth phase of their lives."

Television spot's biggest ad category--automotive--will continue to be strong because supply still exceeds demand. "That's going to require hyper-active marketing. That's not going to change," said Rohrs. "There is going to be a sea change for that business as they are going to commit to fuel-efficiency as a selling point."

The TVB pooled close to 30 different projections and estimates from financial firms, TV sales rep firms, and other advertising estimators to get to its estimates.