Advertising will gain in 2008, according to Lehman Brothers. They expect gains of 3.7% to 310.8B in total advertising over 2007 (and they think this year will be up 2.6% over last), followed by a gain of 2.8% in 2009. But the 2008 pick-up is expected to skew toward digital platforms and even more, to national over local business. In fact, LB is looking for a 6% increase in national to 182.6B, compared to an mere 0.6% increase in local, to 128.2B.
The roller coaster political cycle will help television. Headed to an 0.3% loss this year, broadcast TV is expected to gain 5% in 2008, and then swoop back down 3.9% in 2009. They’re calling for a 1% gain at the big four nets this year, followed by a 3% gain in 2008 and a 3% loss in 2009.
That prediction has predictable results regarding their opinion of radio. LB said, "We remain on the sidelines with radio broadcasters and outdoor advertising companies given their high exposure to local advertising and instead would favor more diversified, defensible businesses that are levered to national advertising and recurring revenue such as large-cap entertainment companies with multiple business segments, such as News Corp. and Time Warner." LB is looking for a 1.4% decrease this year, a 1.8% loss in 2008 and a 1.4% loss in 2009.
The Internet is gobbling more and more of the pie. It had a 5.8% share in 2006, is closing in on 7.1% this year and projects to 8.4% in 2008. It’s growth vector will slow as it does with all new categories, but will remain impressive, hitting 25.6% this year, 23.6% in 2008 and 20% even in 2009.
TVBR/RBR observation: One of the key ways we are all going to have to maintain a nourishing diet is to make sure our own associated Internet properties are getting their fair share of the pie. Whether you want to count that money as broadcasting or Internet is immaterial to us. As far as we’re concerned, a dollar is a dollar is a dollar.