First there was Bob Coen's outlook 12/07/04 TVBR #237 now analyst Jack Myers' latest report, "2005 Spending Forecasts for Eleven Major Media," overall marketing communications spending is projected to grow 6.7% in 2005, with ad growth projected at 4.8%. Promotional and direct marketing spending is projected to increase 7.3%, led by dramatic 12% growth in event marketing budgets. These final 2005 Jack Myers Report forecasts are based on proprietary analysis of the Myers Advertising Confidence Index survey of ad execs. From the report:

Online advertising will continue to grow at rates reminiscent of the late 1990s when the industry was emerging from a virtually non-existent base and was gaining legitimacy. After several years of testing, most major national advertisers are now shifting budgets from website development, R&D, and IT infrastructure into marketing budgets targeted to online media, including search engine and behavioral targeting. Search engine growth will slow slightly to 25% to 30%, but even traditional banner and pop-up ads will experience 20% to 25% increases. Internet video advertising and content sponsorships will be the recipients of growth approaching 40% as broadband penetration increases and original content developers offer new opportunities. Yahoo!, AOL and MSN will benefit from a significant share of these more targeted broadband revenues, but their growth from traditional online advertising will be under 20%. Advertisers are also shifting funds to websites developed by traditional media suppliers such as ESPN, Wall St. Journal, New York Times, Conde Nast, local newspapers and local TV stations. Popularly branded online content will generate the greatest share of online revenue growth in 2005.

Among national television options, second tier and emerging cable nets will generate above average increases of 12% as buyers seek improved cost efficiencies. Top 10 cable nets will grow at a significantly lower rate ranging from 4% to 8%. The top four broadcast networks are also projected to generate annual increases averaging 4%, with ABC and CBS outperforming Fox and NBC by meaningful margins. WB and UPN could be flat to slightly down year-to-year in 2005. Syndicated TV properties are projected to be up only two to 4% in annual growth. NBC, the beneficiary of Olympics' revenue in 2004 and suffering from primetime ratings erosion, will suffer in year-to-year comps.

Network radio is projected to increase one to 3% in 2005 ad revenues. Local broadcast television, the beneficiary of an estimated 1.6 billion in political revenues during 2004, will suffer from difficult year-to-year comps, shifts in spending by auto groups to newspapers, and continued softness in the local retail sector. Although growth for local TV stations is only projected at 1.5%, the industry considers this a positive indication in a quadrennial off-year. Local cable and regional interconnects will enjoy another year of high single digit growth, but will not yet see the surge of spending from broadcast and radio to regional cable that Comcast, Time Warner and Cox have been anticipating.

Local radio declines will accelerate as stations suffer from a declining reputation among advertisers, insistence on internal competitive warfare, and slow response to clutter concerns. Yet, revenues are still projected to increase 2% in 2005.

Consumer magazines should continue to perform reasonably well, with projected 4% growth, Most of the increases will be generated by special interest publications, which are projected to grow 6% to 8%. News and business magazines will be up an estimated 3%; women's service magazines are projected to have minimal 1% growth while the hot category of men's service publications appear to have lost their luster and may decline 2% to 3%.

Trade magazines, which have been struggling with marginal growth for several years, are projected to see 5% growth in 2005.

Newspapers will be the beneficiaries of marketers' efforts to shift budgets to media where they can generate maximum short-term results and their growing concerns about use of DVRs to avoid commercial viewing. Local newspapers are projected to grow 4.2% and national newspapers will grow at a slightly lower rate of 3.5%.

Place-based and movie screen advertising is being forecast by Myers to grow at a 12% rate in 2005. Sports media and media targeted to children should experience five to 6% growth.

Jack Myers Report
Marketing Communications & Advertising Forecast 2005

UPDATED 12-20-04
ADVERTISING	2004				2005
	% Growth	$	% Share	% Growth	$	% Share
Newspapers	3.5%	$46,300	25.5	4.1%	$48,198	25.3
Broadcast Networks	6.5%	$17,398	9.6	4.0%	$18,094	9.5
Network Cable Television	9.6%	$14,659	8.1	9.2%	$16,008	8.4
Broadcast Syndication	4.0%	$2,907	1.6	3.0%	$2,995	1.6
Local & National Spot TV	9.0%	$26,511	14.6	1.5%	$26,909	14.1
Local/Regional Cable TV	11.0%	$5,120	2.8	9.8%	$5,622	3.0
Radio	3.0%	$20,161	11.1	2.0%	$20,565	10.8
Magazines	8.5%	$20,832	11.5	4.0%	$21,665	11.4
Online	25.0%	$7,814	4.3	30.0%	$10,158	5.3
Outdoor	5.0%	$5,663	3.1	4.0%	$5,890	3.1
Yellow Pages	0.0%	$14,117	7.8	0.0%	$14,117	7.4
Total Advertising	6.3%	$181,483	100.0	4.8%	$190,220	100.0
MARKETING COMMUNICATIONS
Direct Marketing		$177.3		5.0%	$186.2
Trade Promotion		$152.6		5.0%	$160.2
Consumer Sales Promotion		$117.7		7.0%	$126.0
Event Marketing		$83.5		12.0%	$93.5
Public Relations		$58.0		2.0%	$59.2
Other		$25.4		3.0%	$26.2
Total Advertising & Marketing		$796.0			$841.4
Source: Jack Myers Report copyright 2004 Myers Publishing LLC
Myers Publishing LLC, Jack Myers, and employees accept no
responsibility for any action(s) taken as a result of this forecast.