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Ad spending shows signs of rebound

Advertising spending is showing some signs of a recovery, two new surveys showed.

Spending for all media is down just 0.2% for the first half of the year - a positive step toward the industry's recovery, according to Taylor Nelson Sofres's CMR ad-tracking unit.

Meanwhile, a report from Standard & Poor's showed that ad-spending should gain momentum in 2003.

Ad spending for the first half reached about $53.7 billion, compared with $53.8 billion a year earlier, according to CMR's estimates, which it released Monday. The study is based on all measured media, including television, magazines, newspapers, radio, outdoor and the Internet. Earlier this summer, the group had estimated that ad spending would be down 0.4%.

"The health of the market is steadily coming back to life," David Peeler, president and chief executive of CMR, said in a prepared statement. "Compared to the dramatic plummets in spending throughout the course of 2001, to be down by less that 1% in expenditures is a positive step in the right direction for ad recovery."

CMR noted that Spanish-language network television, which includes Univision Communications Inc. and Telemundo, showed exceptional strength with a nearly 27% increase in ad spending. Other bright spots included radio and local-newspaper outlets, with gains of 7.5% and 6.3%, respectively. However, spending within the business-to-business magazine group dropped nearly 21%. National newspapers saw a 6.4% decline in ad spending, while the spending for outdoor ads slid 4.6%. Internet ad spending climbed 1.9%.

General Motors Corp. remained the top ad spender in the first half of 2002, even though spending by the auto maker was virtually unchanged at $1.13 billion. Strong gains came from Proctor & Gamble Co., with a 24% rise in first-half ad spending, and Pfizer Inc., with a 22% increase.

Separately, S&P economist David Wyss said he expects ad-revenue growth of 2.7% this year, driven by a turnaround in newspaper advertising, followed by a 5.1% increase in 2003, according to his forecast released Monday.

Last year, advertising plunged 6.5%, the first decline since the early 1990s, amid a retrenchment following the Sept. 11 terrorist attacks.

"The primary determinants of ad spending have been consumer spending and corporate profits - both of which were weak late last year. Both have improved in early 2002, implying a recovery in ad spending," Mr. Wyss said.

"However, it is important to note that we do not expect a return to the rapid growth of the mid-to-late 1990s, when ad spending rose an average 7.5% from 1994 to 1999."

He said magazines will be the slowest of the major media categories to recover.


unknown, The Wall Street Journal. August 26, 2002

Copyright © 2002 Dow Jones & Company, Inc.. All rights reserved.