MyersBizNet is adjusting its annual 2015 advertising spending forecast downward, projecting an overall industry annual increase of less than one percent, the most conservative forecast of any of the leading market analysts. This is the earliest MyersBizNet has adjusted its annual forecasts in the past decade, reflecting a softer than expected first quarter and secular shifts in spending that run counter to several overall economic trends. Typically, declining unemployment and a strong stock market would represent positive indicators for advertising investments. While other forecasters are projecting total 2015 ad spending growth ranging between 2.1% and 4.6%.... (Scroll down for continued analysis and insights.)
|Advertising Spending Forecast|
|UPDATED 4/1/15 Data reported in 000,000|
|"Legacy" refers to revenues generated for traditional non-digital advertising and marketing spend within each category||Updated||Original|
|Advertising Spending 2015||% Change||$||% Change||$|
|vs. 2014||vs. 2014|
|Broadcast Network TV||-4.5%||18,393||-2.7%||18,731|
|Cable/Satellite Network Television||-1.8%||26,523||0.7%||27,205|
|Local & National Spot Broadcast TV||-11.4%||20,455||-11.2%||20,497|
|Local/Regional Cable TV||-7.5%||4,852||-7.3%||4,865|
|Digital Place-Based Video Media (excl. cinema)||4.8%||1,015||6.2%||1,029|
|Online Originated Video Content Advertising||60.0%||3,688||60.0%||3,688|
|Interactive, VOD & Addressable TV Advertising||65.0%||378||80.0%||413|
|Internet Originated Audio||35.0%||1,646||35.0%||1,646|
|Consumer Magazines Advertising||-2.0%||15,092||-2.5%||15,016|
|Out-of-Home/Place-Based (excl. Cinema & D-OOH-V]||-0.5%||7,609||3.3%||7,903|
|Media Directed Social/Promotion/Sponsorships/Native||8.0%||9,853||12.0%||10,218|
|Branded Entertainment/Product Placement||4.0%||7,838||4.0%||7,838|
|Online Originated Display (Banner) Advertising||-6.0%||7,047||-6.0%||7,047|
|Mobile & Apps Advertising (incl. Mobile Search)||72.0%||11,979||72.0%||11,979|
|Videogame Advertising/Virtual Currency||4.0%||1,848||12.0%||1,990|
MyersBizNet believes that when first quarter data is released, their projections will be adjusted. It's unlikely, however, that they will be as conservative as ours until well into the year, at which time we may (hopefully) be proven to have been overly pessimistic. Our analyses factor in overall retail sales that remain sluggish and consumer confidence that is not rising commensurate with growing employment. While MyersBizNet includes more digital advertising categories in our data than most other analysts, search and social marketing investments are reported separately (in MyersBizNet Below-the-Line Promotional/Shopper Marketing Data & Forecasts) and we therefore do not include much of both Facebook's and Google's revenues, which are generating double digit growth. Direct marketing is also reported separately.
Marketers are accelerating the shift of budgets to several digital video providers. This growth is included in our advertising data. Online originated video advertising investments (differentiated from the digital video revenues generated by TV networks, print media companies and digital place-based video) are forecast by MyersBizNet to increase 60% to nearly $3.7 billion. Mobile and app-based advertising, the fastest growing sector, is forecast to grow 72% to nearly $12 billion.
We are projecting a full-year 7.2% decline in legacy broadcast network ad spend and a 2.8% decline in cable network legacy ad spend. This is significantly more conservative than our prior estimates of -2.7% and -0.8% respectively, and is not sufficiently offset by projected by gains in digital spending with the networks, which MyersBizNet has also reduced from our original estimates. Legacy and digital ad spending with broadcast and cable networks is forecast to decline 4.5% and 1.8% respectively for the full year.
While networks will likely sell-out of their available digital video inventory, overall downward pricing pressure will impact both legacy and digital inventory. Most network sellers and network media buyers are bracing for a challenging Upfront season, with a perfect storm brewing. Declining overall ad spending, slowing Upfront demand, multiple alternative options, intensifying procurement led pricing requirements, ratings erosion, increased cost for tent pole franchises such as sports, and agencies' needs to validate their competitive value are combining to create strong and tumultuous headwinds. Additionally, networks such as AMC, FX, Hallmark and a handful of others have experienced ratings gains, are increasing their original programming, have competitive base rates, and have additional inventory for packaging purposes. These networks offer viable alternatives. Larger budgets are also flowing to the more competitive and cost efficient Hispanic networks.
Some TV networks are offering new performance-based research and marketing partnerships, which help influence share allocations but are unlikely to generate increased spending or negate downward pricing demands.
Newspaper spending forecasts have also been slightly reduced, and we have actually increased our forecast for consumer magazine ad spending from a projected decline of 2.5% to -2.0%, based on anticipated growth of digital ad spend. Detailed 2010 to 2020 data and forecasts are available to MyersBizNet member companies by request.