Bob Coen becomes a bear

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The dean of advertising forecasters, Bob Coen, Sr. Vice President, Director of Forecasting, Magna, has revised his outlook for US advertising sharply downward. Presenting his forecast at the UBS 36th Annual Global Media and Communications Conference in New York, Coen said he now expecting 2008 to end down 3.2% and sees 2009 being even worse, with ad spending down 4.5%. He’s expecting significant declines for both radio and TV. If it’s any consolation, his forecast is even worse for newspapers, with both local and national advertising down double-digit percentages.


As dismal as thing seemed a year ago, when Coen noted that he didn’t see high expectations for 2008, the year turned out to be much worse than could be seen at that time. So his forecast that total ad spending would rise a modest 3.7% this year turned out to be overly optimistic and his final figure for the year is a decline of 3.2%.

“We believe the main source of the advertising slowdown has been drains on consumer spending, slow income growth, high debt, and the rise in many consumer expenses. There is little likelihood of relief for consumers in 2009 and not much reason to expect any improvements in marketers’ advertising budgets next year,” Coen said in his semi-annual forecast. Thus, he expects declines for all local media and most national media in 2009 – the exceptions to the latter being small gains for cable and syndicated TV and that Internet display advertising will continue to grow. But even the Internet is cooling off. Instead of double-digit growth, Coen is expecting a 5% gain in 2009.

All in all, the closely watch prognosticator is expecting national ad spending across all media to fall 3% in 2009, with local down 7.6%, leading to a total decline of 4.5%. Newspapers are seen as hardest hit by Coen, with double-digit declines, but radio and spot TV are also forecast to have significant declines.

Other panelists at the UBS confab were similarly pessimistic. ZenithOptimedia CEO Steven King is expecting US ad spending to be down 6.2% in 2009 and Group M Futures Director Adam Smith sees a decline of 3%. The three forecasters represent titans of the international advertising community. Magna is part of Interpublic Group, ZenithOptimedia is owned by Publicis Groupe and GroupM is part of WPP Group.

See Coen’s complete media-by-media forecasts below for both 2008 and 2009.

RBR/TVBR observation: The worry now is that Coen and other forecasters might be too optimistic. Asked about a “worst case scenario,” Coen noted that his numbers could be driven lower if the US economy next year proves to be even worse than now expected. “How many companies are insolvent?” he asked.

Bob Coen’s advertising forecast for 2009

 

Dec. ’08

Ad spend

Media

Forecast

(millions)

Four TV networks -7.5% $15,934
National spot TV -11.0% $8,752
Cable TV 1.0% $21,654
Syndication TV 2.0% $3,631
National radio (net & spot) -6.5% $3,579
Magazines -7.0% $12,053
National newspaper -10.0% $5,353
Direct mail -2.0% $58,430
National yellow pages -3.0% $2,077
Internet 5.0% $11,940
Other national media -2.6% $36,142
TOTAL NATIONAL -3.0% $179,545
Local newspaper -12.0% $26,259
Local TV -7.0% $12,196
Local radio -6.0% $12,884
Local yellow pages -5.0% $11,118
Other local media -3.7% $16,710
TOTAL LOCAL -7.6% $79,167
GRAND TOTAL -4.5% $258,712

Source: Magna

Bob Coen’s advertising forecast for 2008
 

Dec. ’07

July ’08

Dec. ’08

Ad spend

Media

Forecast

Revision

Revision

(millions)

Four TV networks 5.0% 7.0% 3.5% $17,226
National spot TV 10.0% 10.0% -3.0% $9,834
Cable TV 6.1% 8.0% 4.0% $21,440
Syndication TV 1.0% 8.0% 7.0% $3,560
National radio (net & spot) 1.0% -0.9% -10.0% $3,828
Magazines 3.0% 1.0% -6.0% $12,960
National newspaper -1.0% -7.0% -10.0% $5,948
Direct mail 4.5% 2.5% -1.0% $59,622
National yellow pages 2.0% 0.0% -2.0% $2,272
Internet 16.5% 12.0% 8.0% $11,371
Other national media 5.7% 3.5% 0.4% $37,119
TOTAL NATIONAL 5.5% 4.2% 0.1% $185,049
Local newspaper -2.0% -8.0% -16.0% $29,840
Local TV 4.0% 4.0% -9.0% $13,114
Local radio 0.0% -3.0% -8.0% $13,707
Local yellow pages 1.0% 0.0% -3.0% $11,703
Other local media 1.0% 2.4% -0.5% $17,354
TOTAL LOCAL 0.2% -2.4% -9.1% $85,718
GRAND TOTAL 3.7% 2.0% -3.2% $270,767

Source: Magna