Big Increase in Cable, Internet Ads Foreseen

Advertising on cable television and the Internet is poised for dramatic growth as marketers continue to use media to target specific audiences, according to a study released Tuesday by a New York-based consulting firm.

Jack Myers, publisher of the annual media-spending report and head of Myers Consulting Group, predicted a bullish market for advertising through 2005, but said companies will increasingly turn to nontraditional media to get their message out.

Online advertising, for instance, is expected to grow 134% each year and become an $11-billion industry by 2005. Cable companies, meanwhile, will see advertising revenue rise more than 17% each year to $18.5 billion, according to the report.

Myers also predicted that 20-second commercials will emerge as a standard for television, cutting in on the dominance of the traditional 30-second spot, as advertisers seek to reduce skyrocketing advertising costs. The net result: Consumers will see more TV ads.

Total national media spending will rise from roughly $54.9 billion this year to $116 billion in 2005, according to the consulting group, which derived its estimates from numerous sources, including the top 200 advertisers.

National magazines, spot television, TV syndication, network radio, national newspapers and broadcast networks are expected to post modest advertising gains, while national outdoor advertising--mainly billboards--is expected to remain flat.

The biggest gains are reserved for media that allow marketers to target consumers based on their tastes, interests and other characteristics.

Cable channels such as the ESPN sports network--which offer programming aimed at specific groups--will see their advertising dollars rise from $5.2 billion to $18.5 billion over the same period, the report said.

Lower personal-computer prices, faster Internet connections and improved Internet research will fuel the acceptance of online advertising, the report said. By 2005, Myers predicted, 72% of all U.S. households will be online.

In other findings, the report said 20-second commercials, which make up less than 1% of all commercials now, will account for 45% of the network television spots by 2005. Of 330 marketing executives who were surveyed, 12% said their companies are considering the 20-second unit to reduce media costs. A 30-second spot in a top-rated prime-time show costs an average of $388,000 today, but will rise to $1.6 million by 2005, Myers predicted.

Myers’ annual forecast is among those used by advertisers to plan media spending. A second leading prognosticator, Robert Coen of McCann Erickson Worldwide, plans to announce his predictions next week.