Most forecasts for next year say that ad spending in America will decline by 5% or more. Much depends on the fate of the automotive industry: carmakers and dealers normally spend around $20 billion a year on advertising, but Chrysler and Ford scaled back their expenditure by more than 30% in the first nine months of 2008, and are expected to make further cuts in 2009 as they struggle for survival.
The car industry’s woes will hurt all media, but especially television. Analysts at BMO Capital Markets predict that total spending on television ads will fall by almost 9% next year. Only newspapers, where a decline of 12% is expected, are forecast to fare worse. Carmakers have already shifted some of their advertising spending to the internet, and are likely to go further in 2009. Car ads make up 25% of advertising revenues for local television channels, and carmakers have been among the most consistent buyers of high-priced ads on national television.
Article Link (Economist)
Sunday, December 14, 2008
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