If there is any good news for direct marketers, it’s that the generally bleak picture Robert Coen painted for growth in 2008 is matched by minuscule gains for the advertising community at large. Small comfort, but one takes it where one can.
This is especially true in light of 2007’s predictions. In December, using preliminary data, Coen had predicted a modest 3.7% growth for all advertising. In fact, ad spending fell by 0.7% for the year.
At that time Coen, a media forecaster at Magna, had made a similar 3.7% growth prediction for 2008. But on Tuesday Coen trimmed that prediction to 2% growth “because economic expectations have seriously weakened compared to last December, and because consumers’ disposable personal income has failed to improve in recent months,” as he wrote in his report.
The weakened pictures seems to have benefitted advertising with a direct component in mass mediums – national and spot television, in particular – during the first four months of 2008. Direct response ad spending on national networks jumped 16% over the January-through-April period of 2007, while outlay for spot TV ads with a DR component was up 12%. Magazine direct spending, however, fell by 4% during the same period.
As Coen wrote, “There were gains in direct response spending as marketers intensified their efforts to get the consumer to buy.”
Don’t look for this trend to be reflected in direct mail, however. While “[I]n recent years shifts to greater use of near-term direct response marketing tactics helped to develop an upturn in direct mail usage, restrictions on telemarketing also helped” boost this channel’s fortunes.
But that lift has dwindled of late, and 2008 will not bring any significant increases in direct mail, Coen wrote. Nationally, direct mail spending rose 2% during the first four months of the year over last year’s level, and for the entire year is seen as growing by 2.5%.
Internet advertising, however, jumped by 9.8% during the January-April 2008 period, and is seen as rising by 12% for all of 2008. And there is good news for those involved with search marketing, which “has been diverting dollars from traditional advertising…and current indications point to a continuance in the near future.”
But that’s at best a cold comfort. Bottom line? “Most of the recent economic and marketing developments in the U.S. have been unfavorable for the U.S. advertising industry,” Coen wrote. “This will not last, but for the short term the outlook for U.S. advertising is not good.”
