ADVERTISING FORECAST

U.S. Cable Network Ad Spending Forecast to Exceed Broadcast Nets for First Time

Media buyer ZenithOptimedia estimates unchanged broadcast ad expenditures of $17.4 billion this year, compared with a 10 percent cable networks gain to nearly $18.0 billion.

By Georg Szalai, THR

NEW YORK – U.S. advertising spending on cable networks will for the first time trump spending on broadcast networks this year, according to the latest forecast from media buyer ZenithOptimedia.

The company estimates that U.S. broadcast network ad spending will be flat at $17.4 billion this year, down from a previous expectation of 3 percent growth, while cable networks spending will rise to nearly $18.0 billion, up about 10 percent from $16.3 billion in 2010.

For 2012, Zenith expects broadcast spending to drop 1 percent to $17.2 billion despite the return of the Olympics to NBC amid a projected increase in online and cable viewing for the games in London, compared with an estimated 9 percent gain to $19.6 billion for cable.

“Network TV continued to attract the largest share of TV dollars in 2010, but we predict that cable will garner a larger share of spend in 2011 and beyond,” Zenith said. “Network spend began the first quarter of 2011 down year-on-year due to the absence of the Olympics, fewer men’s basketball March Madness games on CBS [thanks to the move of some games to Time Warner’s Turner networks] and the migration of college football games to ESPN. Since our April forecast did not anticipate the amount of college sports moving to cable, we have now revised our figures.”

Zenith is predicting cable will see the largest U.S. ad increase this year except for Internet advertising, which it sees rising 12.6 percent. “Cable networks will continue to build momentum – especially those seen as alternatives to broadcast prime (USA, TBS, TNT, FX), largely thanks to the return of big-spending automotive and financial advertisers,” the firm said, also citing the strong cable upfront this year.

AD Spending Forecast revised

Report cites college football moving to ESPN

By Andrew Wallenstein, Variety

U.S. advertising spending on broadcast TV will be flat in 2011 compared with the previous year, according to a revised forecast issued Wednesday by media buyer/planner ZenithOptimedia.

Back in April the firm had projected a 3% increase, which it reconsidered in light of underestimating the amount of college football that would move to ESPN. ZenithOptimedia also sees broadcast spending decreasing 1% in 2012 despite the presidential elections due to Comcast's pledge to air less time-delayed Olympics programming on TV in favor of the Internet.

Not coincidentally, cable and Internet will see increases of 10% and 12.6%, respectively, in 2011, according to the forecast -- enough to give cable a bigger share of ad dollars than broadcast. Syndication is expected to fall 2%, with 8% drops projected in the year ahead as the sector faces the loss of Oprah Winfrey.

Zenith Lowers Ad Growth Forecast

New outlook has broadcast flat; cable up 10%

By Jon Lafayette, Broadcasting & Cable

Media buyer Zenith has lowered its forecast for 2011 advertising spending growth to 2.1% from 2.5%.

Zenith is predicting increases of 3.5% in 2012 and 3.2% in 2013, but notes that the economy still has not returned to the level it was at before the recession, with high unemployment keeping consumers cautious. Neither has advertising recovered fully. "It will take several years for advertising spending to reach the level it was at in 2008.

The agency says TV ad dollars will continue to move from network to cable, with cable growing 10% in 2011, while broadcast is flat, thanks partly to the shift of college sports to cable. Cable will grow 9% in 2012 and 10% in 2013, according to Zenith, while broadcast is expected to decline 1% in 2012 despite the Olympics airing on NBC.

Zenith also revised its forecast for global ad spending down, but only by 0.1% to 4.1% for 2011. That would put spending at $471 billion, the same level it was at before the 2009 recession. More robust growth is expected in2012 and 2013.

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Global Ad Spend to Rise 4.1% This Year to Return to Pre-Recession Peak

ZenithOptimedia predicts that U.S. advertising will only return to peak levels in several years though.

By Georg Szalai, THR

NEW YORK - Global advertising expenditures will return to pre-recession peak levels this year, but the U.S. will take several years to return to its peak performance, media planning and buying firm ZenithOptimedia predicted Tuesday.

"While the U.S. economy is on the road to recovery, overall performance is lackluster," ZenithOptimedia said. “Although recovery will continue, the economy has still not returned to the level it was at before the recession, and neither has advertising spending.” And it added: “Overall advertising expenditure will not reach [peak] levels for several years yet.”

Assuming current growth rates continue, the U.S. ad market is unlikely to reach the 2007 spending level of $177.7 billion until 2015 or 2016, according to Jonathan Barnard, head of forecasting at ZenithOptimedia.

Beyond economic factors, such as high unemployment and high gas and grocery prices, the firm also cited traditional media that are “struggling to reach new consumers and, as a result, are losing revenue.”

Lowering its growth forecasts for several key regions, including the U.S., but increasing its outlook for Asia, the company now projects global ad spending will reach $471 billion for all of 2011, on par with the peak level reached in 2008 and up 4.1 percent from 2010 – just slightly below the 4.2 percent gain that the company had predicted in April.

Zenith, which is part of advertising giant Publicis Groupe, cited a softening in the Americas and Europe, counterbalanced by stronger growth in the Asia Pacific region, where it eyes a 2011 improvement of 5.9 percent compared with 4.6 percent previously, as reasons for its slightly changed outlook.

"This is partly because the earthquake in Japan has been less disruptive than initially feared," said Zenith, which expects Japan ad spending to drop 2.4 percent this year, better than its previous estimate for a 4.1 percent decline.

For the U.S., Zenith is now projecting a 2.1 percent ad gain in 2011 to $154.9 billion from $161.7 billion last year, down from its 2.5 percent

growth forecast previously. The firm predicted the largest increases this year to come in Internet advertising (12.6 percent), cable TV (10 percent) and cinema (6 percent).