US Ad Spending 2007 Outlook

Ad Spending now is projected to grow only 3.1% in 2007, according to revised estimates released Tuesday by industry forecaster Bob Coen. That's a significant downward revision from the 4.8% the Universal McCann director of forecasting originally projected in December, and means the ad industry will once again fail to keep pace with overall U.S. economic growth. The downgrade is the latest in a series of downward revisions issued by other leading industry forecasters and suggests that some fundamental shifts are taking place in the industry's economics, as advertisers continue to shift money out of traditional media and into new and emerging media platforms, especially online. The fastest growing of the major media tracked by Coen - and the only one projected to rise at double-digit rates - is the Internet, which he predicts will rise 15% to $10.715 billion in 2007. That's about three times the 5.9% rate of growth of the overall national media marketplace, and it doesn't even factor in some of the fastest growing areas of online advertising, including search, social networks and online video.

Those and other emerging platforms - such as mobile marketing, video games, advanced television, and digital out-of-home networks - will actually grow at double the official online rate, rising 31.7% in 2007, according to a companion forecast presented Tuesday by Brian Wieser, senior vice president-director of industry analysis at Universal's sister agency Magna Global.

The side-by-side forecast presentations were a symbolic counterpoint, with Coen representing the old world of the advertising economy and Wieser the new one, which some believe may be responsible for sucking some of the wind out of traditional advertising spending.

Asked what the real growth rate would be for the overall advertising economy if the emerging platforms were factored into the total equation, Coen said it could add as much as a half a percentage point to the industry's growth. "Instead of that figure being 3.1% it might be 3.5% or 3.6%," he said.

But the changes taking place in advertising spending aren't simply a shift from old media to new, said Magna's Wieser, but an even more fundamental redeployment.

"What's actually happening, I would argue, is advertisers are shifting their money out of media that we define as ad-supported media into marketing," said Wieser, adding, "And it's very difficult to measure that."

Some of that spending is going into so-called "below-the-line" marketing services like direct response and promotion that aren't classified as advertising budgets, while others are going into new media platforms that have yet to be classified.

Coen, who has been a fierce champion of the classic definition of advertising, acknowledged Tuesday that it might be time to redefine its meaning to encompass new media and new methods of marketing communications.

In fact, Wieser noted that many of the fastest growing of the emerging platforms still haven't figured out how to "monetize" their reach in terms of advertising revenues. For example, he estimated that for all their growth, online social networks would take in only about $685 million in advertising revenues this year. While that's up a whopping 148% from the $276 million advertisers spent on social networks in 2006, it's still only a fraction of their relative growth in terms of share of total Internet page views. Wieser estimated that the page views of social networks would rise nearly 99% this year vs. only 2.6% for total Internet page views.

He also predicted that social media ad spending would top $1 billion next year, rising 48.9% over 2007.

Similarly, online video is growing rapidly, but still is a relatively small share of total ad spending. With an estimated $365.5 million in ad sales during 2007, online video will grow 55.5% over 2006, but will still account for less than 1% of the total TV advertising marketplace. Wieser projected that online video advertising would 53.2% to $560 million in 2008.

While still small in the context of the total advertising marketplace, these emerging media nonetheless will continue to outpace the overall advertising economy by a wide margin. According to his first estimates for 2008, Coen expects U.S. ad spending to rise only 5.0% to $305 billion in 2008.

Revised 2007 Outlook For U.S. Ad Spending

National Media

• Four TV Networks: $17.175 billion (+3.0%)
• Spot TV: $11.150 billion (-1.0%)
• Cable TV Networks: $20.190 billion (+4.50%)
• Syndication TV: $3.165 billion (-2.0%)
• Total TV: $51.490 billion (+2.3%)
  
• Radio: $4.550 billion (+2.5%)
• Magazines: $13.595 billion (+4.0%)
• Newspapers: $7.015 billion (-1.0%)
• Total Major Consumer Media: $77.650 billion (+2.2%)
• Direct Mail: $61.575 billion (+5.0%)
• Yellow Pages: $2.205 billion (+2.0%)
• Internet: $10.640 billion (+17.0%)
• Other National Media: $38.010 billion (+4.0%)
• Total National: $190.080 billion (+4.2%)

Local Media

• Newspapers: $38.880 billion (-1.5%)
• Television: $15.335 billion (+3.0%)
• Radio: $15.505 billion (+2.0%)
• Yellow Pages: $12.430 billion (+2.0%)
• Other Local Media: $18.080 billion (+3.7%)
• Total Local: $100.200 billion (+1.1%)

Total (All Media): $290.300 billion (+3.1%)

Source: Universal McCann

Court TV Morphs Into TruTV

NEW YORK (AdAge.com) -- The verdict is in, and Court TV's new name as of Jan. 1, 2008, will be ... TruTV. As Court TV General Manager Marc Juris announced at the Turner entertainment upfront presentation in March, the network's rebranding has been in the pipeline for several months.

Fourth-quarter rollout. Turner Entertainment President Steve Koonin said an official rebranding campaign for the network will begin to roll out in fourth quarter, likely around Oct. 1, with a heavy push kicking in around the holidays.
Renaming the established network was a tricky process that ultimately led Mr. Koonin and his team to examine the five letters in the word "court." After spelling the last three letters backwards ("T-R-U"), he was led to the possibility of "Tru TV," which was tested against its more traditional Webster's spelling with viewers and came out on top.
"It's a wink and nod to the past," Mr. Koonin said. "You always have to let the viewer pick."

Content shift. Since being acquired by Time Warner in May 2006, Court TV has undergone a major shift in both programming and infrastructure, losing CEO-Chairman Henry Schleiff to the same position at Hallmark Channel, ad-sales chief Charlie Collier leaving to become GM at Rainbow Media's AMC and research exec Debbie Reichig now reporting to Beth Comstock at NBC Universal.
On the content side, the network has also taken a gradual step away from its breaking news coverage and cops-and-courts fare to more reality-based shows such as "Forensic Files" and John Waters' "Til Death Do Us Part." Forthcoming shows include "Ski Patrol," a reality series about high-stakes life on the slopes; "Black Gold," an oil-rig series from the producers of Discovery's "Deadliest Catch"; and a new daily talk show from ex-"View" host Star Jones premiering Aug. 20.

'Real engagers'. In the age of YouTube and "you" being Time magazine's Person of the Year, Mr. Koonin considers his audience to be "real engagers," and will seek out programming that "speaks to the people." He said user-generated content could also start appearing on network and online.
Early reaction in the buying community sparked curiosity, if not instant approval, of the new moniker. One buyer said, "I'm checking my calendar now to make sure it's not really April 1."

Higher visibility. "I guess it's better than False TV," said Brad Adgate, senior VP-director of research at Horizon. "They have the wherewithal at getting the word out. Quality shows have been running on Court TV for years, [and the Turner acquisition] has helped boost their ratings to higher visibility in the TV landscape."
Shari Anne Brill, Carat's VP-programming, added, "They seem to have a very clear vision of what the new brand will be and who their audience to the network will also be. I look forward to seeing the vision come to life when the channel launches."
Cable networks rebranding themselves under new names or ownership is hardly new. When Viacom acquired TNN (The Nashville Network) in 2000, it rechristened the channel as The National Network for three years before switching to Spike TV in 2003, complete with a new target of males 18 to 34. More recently, Comcast changed the name of its Outdoor Living Network to Versus, with a focus on hockey and nontraditional sports coverage to serve as an alternative to ESPN.