Bogus Ad Spending Forecasts from Robert Coen and Others Mislead Wall Street

Isn39t it about time the trade press and Wall St stopped reporting on Robert J Coen39s ad spending forecasts as if they were gospel The fact that he39s been the industry39s leading forecaster for more than 50 years is argument enough that his methodologies and econometric models are outdated But Coen who is SVP Director of Forecasting for Universal McCann a part of the Interpublic Group of Companies has consistently failed in recent years to match his initial annual predictions to actual yearend results and should no longer be trusted as an accurate prognosticator of market trends Stuart Elliott in his New York Times report on ad spending forecasts last week commented to his credit that Coen quotreduced for a third time his prediction for ad spending growth this year compared to 2006quot Those who follow Coen39s predictions are familiar with this refrain The Times agreed quotContinuing a recent trend Robert J Coen a leading forecaster has cut his estimate for United States ad spending for this year and nextquotAs The Times pointed out Coen39s initial 2007 forecasts issued in June 2006 called for 58 growth in domestic US ad spending he followed in December 2006 with a downward adjustment to 48 which he reduced to 31 in June of this year Last week he again revised his 2007 estimate this time to a stunning 07 He has already begun manipulating his 2008 forecasts from 50 growth estimates last June to 37 last week Why should the markets and the industry give his forecasts any credibility at all If the 07 forecast had any connection with reality we could accept the quarterly adjustments But by any measure Coen is way off baseBy comparison Group M last week held steady with its 2007 and 2008 forecast of 28 and 37 respectively Zenith Optimedia issued its yearend forecasts projecting 25 US ad spending growth for 2007 and 41 for 2008 Zenith Optimedia had predicted 2007 ad spending growth of 37 last June and 43 a year ago BMO Capital Market39s Lee Westerfield reduced his 2007 ad spending forecasts from a previously released 34 to 26 For 2008 he lowered his forecast to 36 growth from 43In October 2006 Jack Myers Media Business Report issued our annual 2007 ad spending forecasts projecting 37 annual growth for 18 media categories Other forecasters typically limit their projections to 12 media categories In October 2007 we updated our forecasts revising 2007 ad spending from 37 to 31 yeartoyear growth The primary change was a more substantial decline in newspaper ad spending although we also adjusted network television ad spending data upwardFor 2008 we are projecting robust 69 increases for domestic US ad spending This growth includes more than 3 billion in total political ad spend increases due to the Olympics a generally strong network television marketplace and low single digit growth in most traditional media The Internet we estimate will expand by 24 in 2008quotIn Memory of Roger Kingwho passed over this weekend after suffering a strokequotWhat Coen and several other forecasters fail to acknowledge or account for are dramatic increases in mobile advertising cinema videogames satellite radio branded entertainment and custom publishing A significant share of this additional spending is being transferred to media from trade and consumer sales promotion and below the line marketing expenditures They are therefore not yet fully impacting traditional media revenuesCombined these categories represent 5567 billion in incremental 2008 ad spending more than onethird of the 160 billion growth we39re forecasting for 2008 Myers recognizes media categories that are gaining popularity among marketers but still not acknowledged by many forecasters Because these ad expenditures are often not tracked by any official trade association or by Nielsen or TNS not reported in public media company accounting statements and not included in federal government reports they are not incorporated into most comparative analyses Eliminate these incremental categories and Myers39 total 2008 growth forecasts would be 45 still more bullish than other forecastersSimilarly content producers who generate incremental revenues for advertising placements in programming are not included in ad spending measurements and formulas More and more traditional ad dollars are moving into integrated marketing campaigns that incorporate mediahosted events promotions and causerelated activities these investments are often managed by separate promotion and event agencies and although the revenues accrue to the benefit of media sellers they are not reflected in the analyses of media agencies such as Universal McCannWith regrets for this commentary to the excellent management team at Universal McCann and with acknowledgement to the long years of leadership and valuable industry service Bob Coen has provided it39s time to finally update ad spending forecast models from the days of FDR when Coen began his tenure to the new media worldMyers full annual data and forecasts for 18advertising media and sixmarketingpromotion categories for 2006 to 2009 are available at httpwwwjackmyerscomcommentarymediaspendingforecastsamp160Register at wwwjackmyerscomregister to receive our daily emailMyers Publishing LLCPO Box 615Pine Brook NJamp160 07058You are receiving this email because you have opted in to receive email notifications To unsubscribe please email kenjackmyerscom

CLICK TO DOWNLOAD THE MYERS REPORT RESEARCH & WHITEPAPERS

Bogus Ad Spending Forecasts from Robert Coen and Others Mislead Wall Street

Author

Publish date

Channel

Jack Myers

Beyond Space: Dr. Scott Parazynski on AI, Courage, and the Human Future - By Jack Myers

More Videos:

CLICK TO DOWNLOAD THE MYERS REPORT RESEARCH & WHITEPAPERS

Bogus Ad Spending Forecasts from Robert Coen and Others Mislead Wall Street

Enjoying This Commentary? There's More to Love

Jack Myers

Beyond Space: Dr. Scott Parazynski on AI, Courage, and the Human Future - By Jack Myers

The payment was successful

Cookies