U.S. Ad Spending to Rise 6.8% in ‘98, Forecaster Says

The economy’s continuing vitality and a strong advertising market are likely to lift U.S. ad spending by 6.8% this year, surpassing $200 billion for the first time, an industry forecaster said Tuesday.

Domestic ad spending is growing faster than the 6.2% expansion predicted six months ago, according to Robert Coen, a senior vice president for the ad agency McCann-Erickson Worldwide.

While stronger than expected, the 1998 growth would still be the slowest since a 5.2% increase in 1993.

In his first estimate of growth for 1999, Coen said U.S. ad spending will probably rise 6%, with momentum building in the second half as 2000 approaches.

Coen has been tracking ad spending trends for 48 years, and his semiannual reports are watched closely on Madison Avenue.

He expects U.S. ad spending to reach $200.3 billion this year, up from $187.5 billion in 1997.

“We are in a good strong upward movement in the advertising industry” barring any unforeseen developments, Coen told about 40 industry analysts and reporters.

National ad spending, which includes network TV commercials and magazine ads, is expected to grow 7% this year, Coen said, while local ad spending, such as classified newspaper ads and commercials on TV and radio, is expected to rise 6.5%.

The Winter Olympics and the congressional elections are each credited with boosting ad spending levels.

Coen said the economic climate of growth with low inflation and low unemployment has also helped.

Outside the United States, Coen expects a 4% increase this year after a 1% drop in 1997. He said big declines in some Southeast Asian countries are likely to be offset by growth in Europe.