And now, a brighter take on 2016 advertising

 

Here's one forecaster ratcheting up its ad spending numbers

By Bill Cromwell

April, 2016

   

The U.S. presidential election will add $6 billion in advertising to the media economy.

The past few months have been a bit dicey for the U.S. economy, and in turn the media economy, which hiccups every time the economy sneezes.

That’s led several forecasters to lower their advertising outlooks for the remainder of the year, predicting advertisers would pull back in the face of rising gas prices and stock market instability, not to mention the parallel shift to lower-priced media such as digital video and social.
But one forecaster actually sees a rosier outlook for the media economy in 2016.

Bucking a trend that started with several forecasts released last month, Carat has raised its 2016 outlook, predicting growth of 4.7 percent for ad spending this year, up from an earlier forecast of 4.5 percent growth.

That 0.2 adjustment may not sound like a lot, but it’s a notable vote of confidence in the general economy.
The ad spending gains will be driven by big events in 2016 that will spark even bigger-than-anticipated investments – the presidential election and Summer Olympics.

“US advertising spend in 2016 will be boosted by the U.S. presidential elections, which will account for an estimated $6 billion,” the report says.

“TV, predominantly local, will make up approximately 65 percent of this additional spend, whilst digital will attract an estimated 10 percent and all other media types will share the remaining 25 percent.”

The Olympics and Paralympics, which take place just after the Rio Games, will add $1 billion in spending.

Another interesting difference between Carat and other forecasts: Carat foresees TV as remaining the dominant ad medium this year and next.

It says TV will receive 38 percent of all spending, and digital will not overtake TV as the top ad medium until 2018. Other forecasters, such as eMarketer, think it will happen much sooner.
Carat also forecasts relatively healthy growth for TV, up 2.9 percent, driven by a strong scatter market. Other forecasters, such as ZenithOptimedia, say television spending will be flat or even down in some subcategories.

Digital, meanwhile, will soar by 15.9 percent this year, but Carat still has it at only 27.7 percent of all ad spending.

Other parts of the forecast echo general trends in media. Print, of course, will be down.
Carat predicts newspapers’ share of ad spending (10.5 percent) will drop below digital display (13.5 percent) and paid search (11.7 percent).