Coen bullish on 2005
Grading himself on his 2004 forecast, Universal McCann Sr. Vice President Bob Coen says he was pretty close to the mark. "In terms of television, most of the sectors are coming in about where we expected, because we expected the Olympics and the elections to have a big effect on them. Some of the other media sectors are somewhat mixed. It was very weak for yellow pages and radio," the ad guru said in his annual presentation to UBS Securities' 32nd Annual Media Week in New York.
Coen noted that local ad spending in general was weaker in 2004 than he had projected, growing only 5.1% overall (as he now projects for the full year), below his original forecast of 6% made a year ago and well below his updated forecast of 7.3% issued last June. He now sees local radio finishing the year with a gain of 4%, rather than the 6% he had forecast a year ago and reiterated in June.
Local TV is finishing a bit ahead of his forecast at 8.5%. His initial forecast of 7% was upped to 8% in June. National spot TV also beat his forecast, up 10% vs. his consistent forecast of 9% growth. Syndication TV (Coen also includes UPN, WB and Pax in this category) beat his forecast with 15% growth, although Coen had upped his original 9% prediction to 13%. The only disappointment in TV was for the Big Four Networks, which gained 9.5%, slightly missing Coen's June forecast of 10%, stepped down from his original 12%.
The Madison Avenue guru is expecting nominal GDP growth of 5.5% in 2005 and he expects advertising-supported media to do even better than that. He's projecting that total US ad spending will rise 6.4% to $280.6 billion, with local advertising up 4.8% and national up 7.4%. he noted, however, that TV "won't look good" because of the lack of any Olympics or political advertising. Still, he's projecting only a 1% decline in TV national spot and he sees local TV rising 2.5%.
For radio, Coen sees national advertising (including both network and national spot) growing somewhat slower than competing media in 2005 - - growing only 5.2%. At the local level, he expects radio to slightly outperform the average with growth of 5%.
The forecaster bases his bullish outlook on the increased spending seen in the last eight months in major ad categories, including auto up 10%, drugs and remedies up 21% and beverages and snacks up 11%. "The economic climate will be reasonably good in 2005 and further restoration of traditional advertising spending levels is expected," he said. Coen also noted that the dot-com sector is a bright spot, with companies such as Amazon.com increasing their ad spending in traditional media by 22% in 2004.
Bob Coen's advertising forecast for 2005
|
Media
|
Forecast
|
|
|
Four TV networks
|
2.0%
|
$16,787
|
|
National spot TV
|
-1.0%
|
$10,834
|
|
Cable TV
|
7.0%
|
$16,722
|
|
Syndication TV
|
3.5%
|
$4,087
|
|
National radio (net & spot)
|
5.2%
|
$4,706
|
|
Magazines
|
7.3%
|
$13,006
|
|
National newspaper
|
6.8%
|
$8,290
|
|
Direct mail
|
9.5%
|
$57,203
|
|
National yellow pages
|
5.0%
|
$2,242
|
|
Internet
|
25.0%
|
$8,828
|
|
Other national media
|
5.6%
|
$35,549
|
|
TOTAL NATIONAL
|
7.4%
|
$178,254
|
|
Local newspaper
|
5.5%
|
$41,328
|
|
Local TV
|
2.5%
|
$14,967
|
|
Local radio
|
5.0%
|
$16,275
|
|
Local yellow pages
|
3.0%
|
$12,257
|
|
Other local media
|
6.1%
|
$17,536
|
|
TOTAL LOCAL
|
4.8%
|
$102,363
|
|
GRAND TOTAL
|
6.4%
|
$280,617
|
|
Source: Universal McCann
|
|
|
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