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Ad Spending Picture Rosiest for Online DMers: Veronis Suhler Stevenson
Aug 5, 2008 6:11 PM , By Richard H. Levey
Advertising spending grew only 1.6%, to $212.56 billion in 2007, according to the latest Communications Industry Forecast study from Veronis Suhler Stevenson. But this growth would have been even smaller if not for the contributions from the cable TV, out-of-home, entertainment, and pure-play Internet and mobile advertising sectors.
According to the study, “The weakening economy prompted brand marketers to shift ad budgets to alternative media and marketing services due to stronger return-on-investment (ROI) metrics, and high usage among target audiences.” These media include online and mobile channels.
Brand marketers are less likely to cut down on advertising during the current slowdown than in hard times past, according to Veronis Suhler. “During the 2001 recession, for example, brand marketers who cut budgets significantly lost market share, a trend they do not want to repeat in 2008.”
As a result, “…the overall market will exhibit only minor declines as brand marketers shift budgets to alternative media that are targeted at hard-to-reach demographics, like the youth, influential and business markets.”
By 2008, advertising spending is seen as reaching $217.59 billion. Direct marketing expenditures, which reached $103.64 billion in 2007, should pop up to $107.64 billion this year, and hit $112.74 billion in 2009—growth rates that outstrip increases in overall ad spending.
Spending on pure-play mobile and Internet platforms amounted to $37.03 billion in 2007, and should reach $43.43 billion this year and $50.14 billion in 2009. Total Internet and mobile spending reached $72.89 billion last year, and should jump to $86.01 billion in 2008 and $99.96 billion in 2009.
Veronis Suhler does admit that its predictions can run to the optimistic side. In its 2006 study, it anticipated that in 2007 direct marketing would grow by 6.1%. The actual figure was 4.6%. Similarly, total ad growth was seen as 4.2%, more than two-and-one-half times the actual 1.6% rate.
This year, within direct marketing, direct mail remains the top category in terms of spending “because of its ability to reach consumers with a more detailed and targeted message than traditional mass media,” according to Veronis Suhler.
“E-mail had the highest growth in the direct marketing segment, because it represents a low-cost alternative to direct mail and generates a strong ROI. Growth for television marketing, primarily long-form response programs or infomercials, decelerated in 2007, due primarily to overall television rating declines as a result of the writers’ strike.”
Veronis Suhler also released five-year growth forecasts for a variety of media. Among direct response channels, anticipated annual growth rates through 2012 were:
Direct mail ($34.44 billion in 2007) – 5.7%;
Telesales ($31.41 billion) – 2.1%;
Catalog ($20.83 billion) -- 3.9%;
E-mail marketing ($9.98 billion) -- 17.2%;
DRTV ($4.9 billion) -- 5%;
Internet and mobile ($37.03 billion) – 14.3%
Aug 5, 2008 6:11 PM , By Richard H. Levey
Advertising spending grew only 1.6%, to $212.56 billion in 2007, according to the latest Communications Industry Forecast study from Veronis Suhler Stevenson. But this growth would have been even smaller if not for the contributions from the cable TV, out-of-home, entertainment, and pure-play Internet and mobile advertising sectors.
According to the study, “The weakening economy prompted brand marketers to shift ad budgets to alternative media and marketing services due to stronger return-on-investment (ROI) metrics, and high usage among target audiences.” These media include online and mobile channels.
Brand marketers are less likely to cut down on advertising during the current slowdown than in hard times past, according to Veronis Suhler. “During the 2001 recession, for example, brand marketers who cut budgets significantly lost market share, a trend they do not want to repeat in 2008.”
As a result, “…the overall market will exhibit only minor declines as brand marketers shift budgets to alternative media that are targeted at hard-to-reach demographics, like the youth, influential and business markets.”
By 2008, advertising spending is seen as reaching $217.59 billion. Direct marketing expenditures, which reached $103.64 billion in 2007, should pop up to $107.64 billion this year, and hit $112.74 billion in 2009—growth rates that outstrip increases in overall ad spending.
Spending on pure-play mobile and Internet platforms amounted to $37.03 billion in 2007, and should reach $43.43 billion this year and $50.14 billion in 2009. Total Internet and mobile spending reached $72.89 billion last year, and should jump to $86.01 billion in 2008 and $99.96 billion in 2009.
Veronis Suhler does admit that its predictions can run to the optimistic side. In its 2006 study, it anticipated that in 2007 direct marketing would grow by 6.1%. The actual figure was 4.6%. Similarly, total ad growth was seen as 4.2%, more than two-and-one-half times the actual 1.6% rate.
This year, within direct marketing, direct mail remains the top category in terms of spending “because of its ability to reach consumers with a more detailed and targeted message than traditional mass media,” according to Veronis Suhler.
“E-mail had the highest growth in the direct marketing segment, because it represents a low-cost alternative to direct mail and generates a strong ROI. Growth for television marketing, primarily long-form response programs or infomercials, decelerated in 2007, due primarily to overall television rating declines as a result of the writers’ strike.”
Veronis Suhler also released five-year growth forecasts for a variety of media. Among direct response channels, anticipated annual growth rates through 2012 were:
Direct mail ($34.44 billion in 2007) – 5.7%;
Telesales ($31.41 billion) – 2.1%;
Catalog ($20.83 billion) -- 3.9%;
E-mail marketing ($9.98 billion) -- 17.2%;
DRTV ($4.9 billion) -- 5%;
Internet and mobile ($37.03 billion) – 14.3%
