NEW YORK: US researcher TNS Media Intelligence has revised down its forecast for US advertising spend in 2007 after a weaker than expected first quarter. The firm now believes the increase will be 1.7% over the previous year, to $152.3 billion (€114.6bn; £77.2bn), compared with its earlier, more optimistic prediction of 2.6%.

Warns TNS ceo Steven Fredericks: "The advertising market has moved onto a slower track than we thought possible just six months ago."

He adds: "It appears that total measured expenditures will pose their smallest gain since the 2001 advertising recession."

The firm says the economic slowdown in the US has resulted in a tightening of belts among advertisers. Smaller businesses are limiting their adspend, while bigger marketers have shifted budgets online and away from traditional media.

Comments a TNS svp Jon Swallen: "The soft economy trickled back to the ad market. A large chunk of ad spending tracks the economy, especially from small to midsize companies."

Local advertisers, in particular, have shifted spend to cheaper, digital alternatives, he adds, a move that has increased revenue woes for newspapers.

TNS projects that newspaper adspend will fall 2.9% this year, while TV growth is expected to be mixed. Cable network TV is forecast to increase 5.9%, while network TV is seen growing only 1.3%. Syndication TV will be up 1.2% and spot TV will dip 5.5%.

Internet display ads, on the other hand, are likely to climb 16%, up from TNS's earlier forecast of 13%. Online now accounts for about 7% of US adspend.

Data sourced from Adweek (USA); additional content by WARC staff