• by Joe Mandese  @mp_joemandese, September 24, 2003

U.S. media planners and buyers appear to be far less optimistic about their one ad spending plans for 2004 than Madison Avenue's leading ad seers. Asked how much they believe they will spend on various media in 2004, a panel of nearly 500 agency media executives told MediaPost their budgets would rise an average of 3.3% over 2003 ad spending levels.

That's roughly half the rate of overall ad spending growth projected for 2004 by the two leading industry forecasters. Universal McCann projects total U.S. ad dollars will climb 6.5%, while Zenith Optimedia anticipates it will expand 5.0% in 2004.

Universal McCann director of forecasting Bob Coen has cited a variety of factors for his rosy forecast, including a U.S. economic recovery, as well as cyclical events like the 2004 Olympic Games and U.S. elections. Zenith has cited similar factors and recently revised its 2003 forecast up modestly based on strengthening market conditions in the U.S.

Estimated 2004 Ad Budget Per Buyer, Per Medium

                       2004 Ad Budget    Vs. 2003 
Broadcast Television       $5,234,000      +10.0%

Cable Television           $2,299,000       -2.0% 
Spot Television            $4,782,000       -1.5% 
Magazines                  $2,006,000       -3.4% 
Newspapers
$1,072,000       -1.0% 
Interactive/Online         $1,573,000      +20.9% 
Email Marketing              $191,000      +16.1% 
Search Engine                $229,000      +41.0% 
Direct Mail
$582,000       +5.7% 
Outdoor                      $353,000       -3.1% 
Radio                      $1,646,000       -2.8% 
Other                        $120,000       -2.9% 
Total
$20,086,000       +3.3% 

Source: MediaPost Forecast 2004 survey conducted in September 2004 by InsightExpress. Base = 469 media planning/buying executives.

The Olympics effect is projected to be especially pronounced for broadcast network TV, which explains the healthy network ad budget gains from the MediaPost panel. Executives who participated in the survey anticipate their broadcast network TV ad budgets will rise 10.0% in 2004.

But it doesn't explain why they believe they will have smaller ad budgets in 2004 for cable TV (-2.0% from 2003) and spot TV (-1.5%). Even radio, which tends to benefit from election year campaign spending, will reap ad budgets that are 2.8% lower than 2003.

The major growth factors in 2004 will be interactive media, such as online (+20.9%), email marketing (+16.1%), search engines (+41.0%) and direct mail (+5.7%).

The findings were unveiled Wednesday during MediaPost's Forecast 2004 traditional media day in New York. Additional findings were revealed yesterday during Forecast 2004's online media day.