• by John Gaffney , June 30, 2003

Big brands, and not a hot upfront TV market, will keep the US ad economy afloat this year, according to the mid-year ad spend update from Zenith Optimedia.

The Zenith report predicts the US economy will grow only 1.7% this year, making 2003 the low-point of the current economic downturn. US adspend should add real growth this year in the neighborhood of +2.7% current, which is pacing well ahead of the European market's return to growth sometime next year.

The report hinged its guarded optimism on the finding that the top 20 advertisers accounted for 22% of CMR-monitored spend and 30% of the growth in 2002. "Recovery in the ad cycle is more likely if big advertisers are leading it. They will still be here next year, and the next," the report states. "Our report contains more details about top advertisers and categories in the main western economies. USA advertising is performing more strongly than the expectations of underlying economic performance would normally merit. Leading advertisers are the motor driving growth evenly across all media. This is high-quality momentum."

Surprisingly, the report found less to cheer about in the recent TV upfront that these had such as critical part in playing. Zenith estimated the upfront commitments at $9 billion, up 12% on the 2002 season. Next year's summer Olympics and presidential election, Zenith said, will be "the main positives in a raft of otherwise neutral or weak economic indicators," which over the last six months prompted Zenith to lift its US revenue forecast by $2 billion this year, $4 billion in 2004 next and $5 billion in 2005.

"A strong upfront is consistent with a rising US ad market," the report states. "It shows that important advertisers are in a decisive mood. But it cannot propel the US ad market single-handedly. Total US TV advertising will grow only slightly ahead of the all-media average this year (2.9% vs 2.7% current). Even if the whole $9 billion does get spent (a good part is cancellable), it is still only 6% of US media. And we do not know how much of it is new money as opposed to a redistribution of budgets between the many species of American TV airtime. A hot upfront is a symptom of the growing scarcity of big audiences particular to the USA. No other large country has, or has in near prospect, such imbalanced demand and supply."

The final 2002 figure for the US market from Zenith is $149 billion. That has grown $919 million, mainly because magazines have lately surged in popularity with automotive, retail, and consumer goods advertisers, and partly because motion picture ads for the first time with a $200 million spend attached. The 2002 figure for the US market from Zenith is $149 billion.