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U.S. Ad Market Slowing Down

The U.S. advertising market is slowing down and is apt to be under a lot of pressure at least through 2009, according to one industry analyst. Lee Westerfield of BMO Capital Markets says, "an advertising cycle downturn now overshadows the media marketplace" and the"waning ad cycle is now in its early stage."

He feels the "ad cycle retrenchment will likely stretch through 2009 and now expects U.S. ad spending growth of only 2.6% this year, 3.6% in 2008 and 2.7% the year after that. Next year's spending will be helped by the U.S. presidential elections and the Olympics, but will be held down by the unwinding of "overinvestment among many financial-service advertisers in recent years."

He draws a parallel to the dot-com bust, "that theme rings eerily familiar to the 2000-2001 period."

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