BMO Capital Markets analyst Leland Westerfield has knocked the overall ad spending projection for 2007 from growth of 3.4% to 2.6%, and he’s taking 2008 growth down from 4.3% to 3.6%. The outlook for 2009 is even worse, at 2.7%. He says there are eerie similarities to the dot.com bust of 2000-2001.
Westerfield says the culprit in 2008 may well be "the unwinding of ‘overinvestment’ among many financial service advertisers in recent years, what amounts to a correction of an advertising demand-imbalance. That theme rings eerily familiar to the 2000/2001 period, when the unwinding of dot.com and telecom categories of advertising led to the advertising recession."
BMO sees radio on not so much a downward spiral as a downward angled plane, with a -1.8% loss this year, another -1.8% loss next year and a -1.7% loss in 2009. Spot TV is expected to continue its election year pendulum swings while veering downward, finishing 2007 at -2.7%, riding the major national elections to a +9.2% gain in 2008, then giving much of that back in 2009 with a -6.3% drop. Broadcast networks are expected to follow a muted version of that same pattern, with a scant +0.1% gain in 2007, a +6.2% gain in 2008 and a -1.4% loss in 2009.
Cable and outdoor will fare better if BMO is correct. Cable will stay in the black with gains of +3.3% this year followed by +3.6% and +4.2%. Outdoor’s numbers are even better, at +7%, +4.7% and +7%.
The big gainer? If you said Internet, Don Rickles might award you a cookie. Its numbers are predicted at +24.2%, +19.6% and +30%. The big loser? If you said newspaper, help yourself to another cookie. It’s red record is set at -5.3%, -4.5% and -6.2%.
RBR observation: If this was a Dickens novel we might have some recourse from these ominous forebodings from the Ghost of Things Yet to Come by repairing our wicked ways. The problem is there seems to be an entire platoon of these ghosts running around, intoning pretty much the same thing. All we can say is make sure you’re tight with your local community, be kind to your local politicians, and try to get your fork into that burgeoning slice of pie on the Internet plate.