US comms spending to soar

17 April 2012

NEW YORK: The US communications industry is set to raise its overall expenditure by 5.6% in 2012, with digital platforms driving much of this growth.

According to a new report by Veronis Suhler Stevenson (VSS), a private equity firm, annual spend for the nation's communications and media sectors will reach almost $1.2tr this year, before rising to $1.4tr in 2015. This implies a compound annual growth rate of 5.7% in the next three years.

Mobile and internet services are set to be the biggest contributors to 2012 growth, with spend rising by 18.1%. Earned media, including PR and word-of-mouth, will increase by 14.6%, with broadcast TV up 9.3%.

By way of comparison, US GDP is forecast to grow by 4.4% this year.

In comments accompanying the report, VSS cited the media fragmentation of recent years as having long-term benefits for communications industry expenditure.

"What has resulted is an increase in spending within the U.S. communications industry as both consumers and businesses begin to expand their use of a variety of communications platforms and tools, such as mobile devices and tablets," VSS president John Suhler said.

"Bottom line: this is the best news for the industry in several years."

The VSS survey includes expenditure forecasts from all communications industry sectors, from traditional ad media such as TV and outdoor to channels as diverse as branded entertainment, consumer promotions, instructional media and book publishing.

Warc's latest International Ad Forecast, which solely measures adspend for the major above-the-line media channels only, predicts that US expenditure will grow by 4.1% in 2012.

Data sourced from VSS; additional content by Warc staff