The financial augurs at Merrill Lynch have again revised US adspend projections downwards, predicting the first two-year decline since the Great Depression.
Broadcasting analyst Jessica Reif Cohen blamed the decline on the dotcom implosion, the absence of political or Olympic advertising and the fallout from September 11, all of which have produced what she described as a “100-year flood” event.
She added that the current downturn is similar to that around the time of the Gulf War, though there is increased pricing pressure on TV advertising this time round due to the increase in cable ad inventory.
The new forecasts are for a 3% fall in US adspend this year (4.5% without direct mail) and a 1% decline in 2002. However, attempts to kick-start the economy, plus ads for the Winter Olympics and Congressional elections, should see a recovery in the second half of next year.
News source: AdAge.com