• by Joe Mandese  @mp_joemandese, January 9, 2007

The outlook for ad spending in 2007 continues to trend downward. On Tuesday, influential ad tracking firm TNS Media Intelligence issued its first forecast of the new year predicting a "tepid" 2.6% gain in U.S. ad spending across the media it measures. This morning, Maurice Levy, chairman-CEO of Publicis Groupe, told a French newspaper that global ad spending would rise "less than 5%" this year.

The mediocre outlooks follow an update issued late last week by the equities research team at Merrill Lynch calling for only a 2.9% gain in U.S. ad spending this year.

All of the forecasters agree on one thing: Online ad spending will outpace traditional media. And TNS MI, at least, believes that is one of the key factors having a moderating effect on the overall ad economy, because marketers are getting a bigger bang for the buck online and spending less money overall.

The other big factor, according to TNS MI, is the overall growth of the U.S. economy, which is projected to be stronger during the second half of the year. As a result, TNS MI projects U.S. ad growth will 2.1% during the first half and 3.2% during the second half of 2007.

Although TNS MI's online figures measure only display advertising and do not account for the rapidly growth online search advertising category, the company still believes the Internet will have the greatest advertising share gains this year, expanding to 7.2% of U.S. measured media advertising budgets, a gain of 0.7 points form 2006.

The biggest loses, according to TNS MI will come from newspapers, spot TV, network TV, and radio.

2007 PROJECTIONS BY MEDIUM (Ranked by Growth Rate)
			% SHARE OF AD SPEND
	% CHANGE vs. 2006		2007 (forecast)	2006 (estimate)
Internet1	13.4%		7.2%	6.5%
Syndication TV	6.6%		2.9%	2.8%
Outdoor	5.7%		2.6%	2.5%
Consumer & Sunday Magazines	5.5%		17.9%	17.5%
Spanish Language Media	5.4%		3.3%	3.2%
Cable Network TV	4.7%		11.9%	11.7%
Business-To-Business Magazines	2.1%		3.0%	3.0%
Radio	1.7%		7.3%	7.4%
Network Television	0.6%		15.2%	15.5%
Newspapers2	-0.9%		17.7%	18.4%
Spot TV	-2.8%		10.9%	11.6%
Source: TNS Media Intelligence 1. Internet estimates reflect display advertising only 2. Newspaper estimates do not include web site advertising Share figures may not add to 100.0% due to rounding