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Ad Spending Expected to Soar

Ad spending will soar 8.3 percent next year in the United States, an even bigger jump than this year's 6.8 percent, thanks to a strong economy plus the Summer Olympics and presidential election ad wars, a key advertising industry forecaster predicted yesterday.

That would be the biggest increase since spending rose 8.7 percent in 1994.

Robert Coen, director of forecasting at ad agency McCann-Erickson Worldwide's media-buying arm, told analysts at the Paine Webber Media Conference in Manhattan yesterday that ad spending will hit a record $233 billion in 2000.

The biggest percentage gains will be on cable TV, up 15 percent to $8 billion, and on the Internet, up 75 percent to $3.2 billion, Coen predicted.

"The outlook for the new century appears to be very good for the advertising industry," Coen said in his report. "The use of advertising, or non-personal mass persuasion in paid media, will undoubtedly grow in importance as new technologies and greater automation impact all phases of society and commerce."

For national advertising, increases include 9 percent for the four biggest broadcast TV networks, to $16 billion; 7.5 percent for magazines, to $11.9 billion; 8 percent for newspapers, to $6.4 billion; and 8 percent for radio, to $4.1 billion.

The gain will be 6 percent to $43 billion for local ads in newspapers, 8.5 percent to $13.7 billion for local TV ads and 9 percent to $14.3 billion for local radio ads.

Overseas, ad spending will grow 7 percent to $231.4 billion in 2000, compared with a 5.3 percent gain this year and a 2.2 percent drop last year.

This year's estimated total of $215.2 billion in U.S. ad spending surprised forecasters, who originally expected less of a gain. A year ago, Coen predicted a 5.5 percent increase for this year, rather than the 6.8 percent he now estimates, thanks to a strong economy.

Among the top gainers this year are cigarette ads, up 60 percent for the first nine months of 1999 because of big issues-oriented campaigns; brokers and mutual funds, up 56 percent; telecommunications, up 43 percent; colleges and universities, up 21 percent; computers, up 20 percent; resorts and tours, up 18 percent; and drugs and remedies, up 14 percent.


Harry Berkowitz, Newsday. December 7, 1999

Copyright © 1999 Newsday. All rights reserved.