Brian Wieser, whom you may remember from Magna Global, is now an analyst at Pivotal Research Group, an independent Wall Street research company. A report he’s authored says that during 2012, they expect advertising will grow by 1.0% on a normalized basis in the US (excluding the impact of political and Olympic-related activity), based on extensive ongoing conversations with media buyers and sellers. In a broad brush stroke, most traditional media sectors will not see the increases of 2011—but then again, the comps are now tougher than 2010. Digital, on the other hand, remains in rocketship mode.
Wieser doesn’t foresee any significant new categories/brands emerging in 2012, and expects spending levels will generally flatten through the middle of 2012, “after which the impact of status quo ‘new normal’ should return, with weak growth in the periods that immediately follow. In the shadow of August’s U.S. debt downgrade, budget-setters approached uncommitted advertising expenditures with hesitation, although not to the extent initiatives were halted outright (as occurred during in Q4 2008),” he says.
Individual medium growth trends in 2012 will reinforce a “have/have-not” media economy, between TV and digital on one hand and other forms of traditional media on the other, says the report. Simply put, in scarce times, marketers are concentrating their budgets among their primary medium (often network TV for large brands seeking awareness) and a secondary medium (often digital platforms for traditional brand marketers, who typically pursue engagement-based outcomes).
Weiser also expects to see National Mass Media continuing to gain share at the expense of Local Mass Media. But Direct Media should continue to grow faster than Mass Media. In this context, Mobile advertising will grow fastest, up 37% in 2012, decelerating in percentage terms from 2011, but adding a comparable amount of dollars in absolute terms. Paid Search will add the most in absolute dollars among all media during 2012, up from $14.8B to $17.B.
Weiser expects National Cable will perform well vs. other media, that medium should slow significantly in 2012, rising by only 4.8% (compared to a gain of 9.0% in 2011). Local Newspapers will fare worst during 2012, falling by 9.4% to generate $1.8B less revenue than in 2011. Only Directories will perform weaker in percentage terms, falling by another 22.6% for the year.
2012 estimates, excerpted from the report:
National Broadcast – English -0.3%: “High price points push brands to shift budget shares into cable despite broadcast network advantages (broad reach, high impact units), independent of declining ratings.”
National Broadcast – Spanish +4.4%: “2011 figures were muted by tough comparables due to impact of World Cup in 2010, damping underlying rapid growth. Macro-headwinds will hold back medium in 2012.”
National Syndication -2.5%: “While still an outlet for cost-conscious national TV buyers looking for broadcast substitute, there is a dearth of premium content (better provided by cable presently).”
Total National TV +2.7%: “National TV’s budget share has grown significantly in recent years, but may be hitting a peak given pressures to use other media (i.e. Digital).”
Online Video +21.8%: “Rising inventory availability off of a low base paired with latent demand from marketers for perceived benefits from the medium contribute to sustained rapid growth.”
Mobile +37.0%: “Improved aggregation of fragmented audiences drives ad networks, but development of endemic ecosystem (i.e. m-commerce) causes underlying long-term growth.”
Total National Digital +13.9%: “National Digital gains share because of market expansion (from new brands who can use medium) and a shift of budgets from brands with engagement objectives.”
Total Network + Satellite Radio -1.0%: “Medium still challenged to find new brand categories which uniquely benefit from radio’s unique advantages. Some improvement due to digital initiatives.”
Local Broadcast TV -0.3%: “Local broadcast TV remains best alternative for large local and regional brands to drive awareness. Impact of political skews annual results significantly.”
Local Cable TV +2.7%: “Beyond same trends affecting local broadcast, local cable sees extra growth from advanced TV initiatives and rising use of local cable as substitute for local broadcast.”
Total Local TV +0.3%: “Local TV generally remains the best vehicle to drive awareness of brand attributes, but political advertising remains key driver of year-year changes.”
Political +9.9%: “Political should generate $2.5 billion in incremental advertising during 2012, up from $551 million in 2001 and $2.2 billion during 2010.”
Total Local Radio +0.2%: “Local radio still valued by core advertisers, but the medium has lost its sheen for most of the largest marketers, many of whom are unlikely to consider the medium.”
Total Local Digital +9.3%: “Robust growth ahead as initiatives are underway to integrate Digital sales with local media properties. Much of the growth comes from new media advertisers.”
Total Local Media -1.6%: “Local continues to be less robust than national in large part because national brands have focused upon cost-effective marketing substitutes from national media channels.”