Pages

Wednesday, June 13, 2007

TNS Cuts Ad-Growth Forecast


By Katy Bachman/Mediaweek

NEW YORK After reporting weak advertising growth for the first quarter, TNS Media Intelligence today downgraded its year-end forecast to increase 1.7 percent to $152.3 billion. The ad tracking research firm had originally expected advertising to grow 2.6 percent.

The first half of the year will be the slowest, growing only 1.2 percent, followed by some improvement in the second half of 2.3 percent.

The new forecast is the smallest annual gain since the 2001 recession. "The advertising market has moved onto a slower track than we thought possible just six months ago," said Steven Fredericks, president and CEO of TNS.

With a slowing economy, advertisers are taking a more cautious approach, especially the medium and smaller-size advertisers that are more sensitive to economic conditions. "With the slowdown in economic activity, that swing money moves to the sidelines," said Jon Swallen, svp and director of research at TNS.

Marketers also continue to scale back their budgets for traditional media in favor of some of the less expensive and newer digital alternatives. Internet display advertising is forecast to grow 16 percent.

TV advertising growth is expected to be mixed. Cable network TV is forecast to increase a 5.9 percent. In contrast, network TV is seen growing only 1.3 percent, syndication TV will be up 1.2 percent and spot TV will dip 5.5 percent.

Other media projected to show gains include outdoor (up 4.6 percent); consumer and Sunday magazines (up 4.5 percent) and Spanish-language media (Hispanic network and spot TV, magazines and newspapers, up 3.7 percent).

The outlook for newspapers, which account for 17 percent of the total ad volume, is a drop of 2.9 percent.

Declines are also forecasted for radio (down 0.3 percent) and business-to-business magazines (down 1.5 percent).

"Local media are taking a bigger hit than national media," said Swallen. "A lot of the core local categories have cut back, such as auto, or like telecom and retail, are consolidating and shifting out of local into national."

Some categories will remain competitive, but not strong enough to offset sluggish conditions among telecom, prescription drug and direct response advertisers.

No comments: