Media Curmudgeon

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December 06, 2006

‘Tis the Season for Predictions, Tra La La

Robert Coen, the world’s leading media forecasting guru, gave out his numbers Monday, December 4, 2006, at USB’s annual forecast/prediction meeting. What most forecasters predicted was a 2007 that would show slower growth in media spending than 2006 did—pretty safe in that 2007 is neither an election nor an Olympics year. Contrarily, Coen predicted that many marketers would increase ad budgets as they “start turning their attention back to long-term communications” from cost cutting, according to Stuart Elliott in Tuesday, December 5th’s NY Times (page C3).

Coen, a senior vice president and forecasting director at Universal McCann, part of the Interpublic Group, predicted the four largest television networks would increase only 3 percent in 2006. Coen predicted that local media would be the hardest hit because “consolidations are killing things locally.” Department stores, pharmacies, and hardware chains are consolidating and hurting local dollars, it seems. Coen predicts local radio will increase only 1.5 percent and newspapers will increase only 2 percent, well below the 4.8 percent increase he predicts for total ad spending in 2007 over 2006.

My guess is that Coen is not contradicting himself by predicting that marketers would increase ad budgets and predicting that local media would show slow growth. It means that the large national advertisers’ increases will offset the cut-backs in ad spending locally, although, the NY Times’ Stuart Elliott didn’t say so in his fact-jumbled article.

I have found that in the past Jack Myers of the Jack Myers Media Business Report has been fairly accurate in his annual media forecasts, especially about the Internet. Myers, I think, is more realistic for newspapers than Coen, too. Myers predicts that newspapers will show only a 0.2 percent (two-tenths of one percent) growth in ad revenue for 2007. I guess he doesn’t have much faith that Yahoo or Google, which recently announced partnerships with major newspaper chains, will have much impact, which I agree with.

Myers also predicts that “Local & National Spot TV” will be up 9 percent, a figure that I think is too high. He predicts “Terrestial Radio” will be up 2 percent and that “Satellite Radio” will be up 160 percent from $45 million to $117 million. This is a little high, I think, especially after Mel Karmazin announced the same day, according to a headline in the Wall Street Journal, “Sirius Cuts Subscriber Outlook as Sales Pace Slows” (page B3). If Sirius and XM’s subscriber pace slows, then an advertising slowdown will follow, because advertising follows audiences.

There is one thing every prognosticator agrees on (to varying degrees ranging from 25 to 30 percent) that Internet advertising will increase dramatically. Of, course I agree. In fact, I think advertisers, particularly traditional print advertisers, will discover the elephant in the room—that large, especially full-page ads, in newspapers don’t work well and are a waste of money. They will switch faster than expected to the Internet.

As long as we’re smoking something that smells funny and making predictions, I predict that MySpace will soon pass Yahoo as the number-one website, and that I won’t get kissed, no matter how much mistletoe I hang up.

Posted by Charles Warner at December 6, 2006 09:44 PM

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