January Ad Demand Remains High: Online, Cable Highest

Perceived demand for advertising inventory in the major media dipped modestly in the past month, but remains at a recent high, according to media planners and buyers surveyed in January by MediaDailyNews. Nearly half of the 285 executives, members of MediaPost's Advisory Panel, said their demand for advertising inventory in January had grown relative to the same point a year ago. While that's a six-point decline from the 55 percent of executives who said their year-over-year demand had grown in December 2003, it nonetheless represents the second highest level since MediaDailyNews began tracking perceptions of advertising demand in August 2003.

Moreover, the percentage of executives who said their demand was even with year-ago levels hit a recent high of 43 percent, suggesting that the underlying demand is either stable or growing among 92 percent of the respondents. Only 8 percent of the MediaPost panel said their demand for advertising inventory was down versus January 2003.

The results of MediaDailyNews' January Ad Demand Index reinforce an ongoing improvement in perceived market conditions for advertising demand. Other recent positive indicators include strong third-quarter earnings results among the majority of the leading national advertisers and some strong results from some that have begun reporting fourth-quarter earnings, including Procter & Gamble.



Ad Demand Continues To Trend Upward

August/03 December/03 January/04 01/04 vs. 12/03
Increased: 39% 55% 49% -6 point
Stayed The Same: 43% 39% 43% +4 points
Decreased: 18% 6% 8% +2 points

Source: MediaPost survey of media planners and buyers conducted online by InsightExpress. Base: January = 285 respondents; September = 226 respondents; December = 195 respondents.

The Conference Board's Consumer Confidence Index also remains strong, Although the U.S. Commerce department Friday reported that the nation's economic expansion slowed modestly in the fourth quarter of 2003. Based on new estimates, the U.S. economy expanded at an annual rate of 4.0 percent during the final three months of 2003.

Even so, there is a general sense of improving expectations of underlying advertising demand for most major media during the early months of 2004, especially in light of the incremental stimuli of the 2004 Summer Olympic games and a political ad bonanza expected from the 2004 presidential campaign.

Online media remains the most vibrant, according to the MediaPost panel, although it should be noted that those findings might have been colored by the composition of the panel, which has a relatively high percentage of executives involved directly in online media. Future versions of the Ad Demand Index will tabulate responses among executives who plan/buy mostly online or non-online media.

Following online media, demand for cable TV, ad inventory remains the strongest. Sixty-two percent of the MediaPost panel said their demand for cable TV ad inventory has risen vs. January 2003, 12 percentage points more than the December index found.

Demand for outdoor media was the next most vital, displacing radio, which plummeted 10 percentage points from December in terms of executives who said their year-over-year demand had grown for radio ad time.

Magazine ad demand continued to erode in January, albeit at a modest rate of one percentage point, while newspaper demand remained relatively even with December perceptions.

And while perceived demand for network ad inventory grew four percentage points, it remains the lowest of the major media tracked in the Ad Demand Index.

January 2004 Ad Demand Index

How Ad Demand Has Changed Relative To The Same Point A Year Ago

Increased Stayed The Same Decreased
Online 68% 24% 8%
Cable 62% 27% 11%
Radio 36% 44% 20%
Outdoor 39% 38% 23%
Magazines 26% 52% 22%
Newspapers 24% 46% 30%
Network TV 21% 50% 29%
All Media 49% 43% 8%

Source: Source: January 2004 MediaPost survey of media planners and buyers conducted online by InsightExpress. Base = 285 respondents.
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