Branded entertainment set for growth in US

11 August 2010

NEW YORK: Branded entertainment is set to be among the major growth areas in the US advertising sector during the period to 2014, Veronis Suhler Stevenson has predicted.

The private equity firm has estimated that the media and communications category will post an expansion of 6.1% each year from 2009-14, to a value of $1.42tn (€1.1tn; £902bn).

This forecast can be measured against an uptick of only 3.5% in 2010, with the rising popularity of the web, mobile devices and apps being the main contributors to the overall trend.

Indeed, the media industry should outperform the US economy, as GDP is pegged to increase by 5.8% annually in the timeframe covered by Veronis Suhler Stevenson's report.

"Everything that is an opportunity for consumers to show their preferences is growing faster than economic growth," John Suhler, a co-founder of the firm, said.

However, traditional media is due to remain "sluggish" as revenues climb by just 2.2% a year to $159.3bn, while "marketing media" such as promotions are in line to see an average improvement of 1.8%.

More positively, demand for "targeted media" like branded entertainment, direct mail and business-to-business platforms will surge by 7.3% every 12 months, reaching $266bn in all.

Elsewhere, returns for the business and professional information segment will jump by 8.2% annually to $249bn, with applications offering data management and analytic capabilities driving this momentum.

"Business information services and professional information services, like Reed Elsevier, are growing faster and did not suffer the same downturn effect that advertising and marketing businesses did," said Suhler.

Entertainment and leisure - including TV programmes, video games and movie ticket sales - will also generate an increase of 6.3% a year to $354bn by 2014, with pay-TV one of the primary beneficiaries.

Online and mobile services aimed at consumers should deliver an annual expansion of 15% from 2009 to 2014, the Veronis Suhler Stevenson study added.

Data sourced from Bloomberg; additional content by Warc staff