After seeing ad spending trail GDP growth this year, Universal McCann guru Bob Coen expects more of the same in 2006, with total ad spending up 5.8%, vs. 4.6% this year. Other than the cyclical boost from political and Olympics advertising, he doesn't see anything coming in '06 to light a fire under radio and TV advertising. After so many decades of observing the behavior of advertisers, as Coen made his annual appearance at the UBS Media Week Conference in New York he seemed to be baffled by their behavior in 2005. He said major companies usually launch new products and market them when the economy is rebounding. "That didn't happen in 2005," he noted. So, while he expects the economy to be "reasonably healthy" in 2006, he doesn't see anything on the horizon to drive advertising demand, other than some upward pressure on TV rates created by political advertising pressuring inventories. Once again, the most robust growth is expected for Internet and cable TV, along with direct mail. Coen is looking for network TV to be up 6.5%, national spot 8.5% and local spot 4.5% next year - - decent growth, but not extraordinary for an Olympics/political year. In radio, he expects national business (network and spot combined) to be up 4% and local 4% as well. Here's his complete forecast by medium.

Bob Coen’s advertising forecast for 2006
	Dec. '05	Ad spend
Media	Forecast	(millions)
Four TV networks	6.5%	$17,977
National spot TV	8.5%	$11,411
Cable TV	7.0%	$20,210
Syndication TV	4.5%	$3,963
National radio (net & spot)	4.0%	$4,619
Magazines	5.5%	$13,566
National newspaper	3.5%	$8,014
Direct mail	7.5%	$60,874
National yellow pages	3.0%	$2,206
Internet	10.0%	$8,669
Other national media	6.4%	$37,650
TOTAL NATIONAL	6.8%	$189,159
Local newspaper	3.0%	$41,360
Local TV	4.5%	$14,705
Local radio	4.0%	$16,129
Local yellow pages	3.0%	$12,494
Other local media	6.8%	$18,158
TOTAL LOCAL	4.0%	$102,846
GRAND TOTAL	5.8%	$292,005
Source: Universal McCann

RBR observation:
Much as we'd like to see more growth in 2006, we can't disagree with Coen's basic projections. His outlook for television is only slightly more pessimistic than the TVB's forecast (9/9/05 TVBR #177), while being slightly more bullish on cable.

On the radio side, his final projections for this year still look too high, given the industry's flat performance through October reported by RAB (12/1/05 RBR #234). That may explain why he appears, at this point, to have too high of a projection for 2006. Indeed, when a member of the audience at the UBS conference asked why he was so optimistic about a radio recovery next year, Coen insisted that he wasn't optimistic at all. "The radio situation is in turmoil right now. So much of that radio money, the primary source of it is local entrepreneurs, mainly retailers and restaurants, and many of them are being consolidated. Many of them are under great squeeze as far as their margins are concerned. So it's been a tough period for radio. I think it'll improve a bit, but I don't see it turning around sharply," Coen said.