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Glimmer of Hope for Upturn in Media Spending Forecast

21 Oct, 2009 Response This Week

NEW YORK – Several retailers, including Google and Gap, have announced that their advertising and media sectors are finally crawling out of the recession-made trenches and moving toward recovery, reports

Google reported a 27-percent third-quarter profit, and Gap announced a marketing spending increase of $25 million in the third quarter and $45 million in the fourth.

In a recent report from ZenithOptimedia, ad spending in 2010 should increase by 0.5 percent. While down from last July’s forecast of an increase of 1.6 percent next year, it’s still a step in the right direction. ZenithOptimedia also revised its original forecast that spending would fall 8.5 percent in 2009.

In the television market, ad buyers report that scatter advertising is doing better. “Broadcast/cable scatter rates are up mid-to-high singles [digits] vs. the upfront, and business is being written as few as two days before air date, which we expect to continue for at least the rest of the year,” says John Janedis, media analyst for Wells Fargo. “We think some of the high-demand cable news shows are sold out for the month of October.”

Spending on major media in the United States is expected to fall 4.4 percent in 2010, about a third of what it dropped in 2008, but spending ought to increase a marginal 0.7 percent in 2011. So while media outlets and marketers are optimistic, they’re remaining cautious.

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