Slow days ahead for ad spending

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NEW YORK -- Global advertising spending growth is likely to slow next year, according to projections released by UBS on Friday, the last day of the third annual Advertising Week here.

UBS analysts predict ad spending across all media to grow 6% for this year, and 5.1% in 2007.

Asia Pacific and Europe, which are full of emerging markets, are regions that should experience a 0.2% increase each in overall ad spending growth momentum in 2007 compared with this year, UBS estimated. That should leave Asia with growth of 6.9% next year and Europe with 5.8%.

North American ad spending should expand 3.7% to an estimated $195.8 billion next year, UBS said.

Television still should attract about $171 billion in ad funds next year -- the lion's share among all forms of media -- but television ad growth will slow from an estimated 6.8% this year to just 4.2% for 2007.

Ad spending on the Internet and in emerging markets will drive the bulk of overall ad growth next year, UBS said.

Meanwhile, Advertising Week closed Friday with KFC's Colonel Sanders and the Kool-Aid Man winning the favorite ad icon online poll. FedEx and the Texas Department of Transportation won the vote for favorite slogans with "When it absolutely, positively has to be there overnight" and the anti-litter campaign "Don't mess with Texas."

Mike Murphy, chief revenue officer at Facebook, discussed the bullish ad revenue outlook for social networking sites in one of several events concluding the weeklong celebration of Madison Avenue.

Murphy declined to address buzz that Yahoo! Inc. is in talks to acquire the 2-year-old business. Other major media and technology firms also have been believed to have taken a look at the firm.

Facebook just opened its site to all Web users with valid e-mail addresses; previously, it accepted only users with e-mail addresses supported by approved organizations, namely schools, some companies, nonprofits and government entities.

Murphy was asked if this move might defeat the purpose of a niche social network. "We have opened up the site to even more 18- to 24-year-olds," he said. "Advertisers will still have the ability to target communities down to user groups that share 'dot-edu' (or college) e-mail addresses."

Internet ad spending should take a bigger slice of the advertising pie in 2007, according to UBS' latest estimates. Its 8% share of overall ad dollars could reach $32 billion in 2007, representing growth of about 24.9% -- far outpacing growth in ad spending on all other media forms.
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