Ad spending continues downward

Slump expected to persist

U.S. advertising spending forecasts continue to tumble.

BMO Capital Markets analyst Leland Westerfield on Monday reduced his projections for 2008 and '09 because of "a deeper and wider slump" than previously expected.

He halved his U.S. ad growth estimate for the current year from 3.6% to 1.8% and cut his 2009 prediction from 2.7% to 1.9%. Radio ad spending will fall 5% in 2008 and 3% in 2009, he said, with TV spending rising 3% this year before declining 3% next year.

Westerfield, however, expects a growth uptick to 6.1% in 2010. "A more protracted downturn lies ahead, with a lagging recovery perhaps in store for 2010," he wrote in a report published a day ahead of a Tuesday estimate update from Universal McCann ad prognosticator Robert Coen.

Given that various forecasters have recently cut their U.S. ad outlook, Westerfield expects Coen also to lower his 2008 forecast of a 3.7% gain.