What a difference a year makes. At this time in 2006, Robert J. Coen, senior VP/director of forecasting at Universal McCann, issued his much anticipated annual forecast report for the advertising market. The prognostication was a rather flat 4.8 percent growth in ’07 as compared to ’06 in total U.S. advertising revenue. The research pegged the ad expenditure pie as amounting to slightly less than $300 billion in ’07.
That modest projection, though, looks almost bullish when stacked up against the readjusted reality as Coen recently lowered his projection for U.S. growth this year to a nominal 0.7 percent. Coen noted that in ’07, advertisers tightened the reins on their advertising budgets and strongly opposed above-average media price increases.
The performance in ’07 is all the more dismaying when compared to the 5.2 percent increase enjoyed by the industry from ’05 to ’06. Fast forward to today and there are the additional negative dynamics of skyrocketing energy costs, as well as apprehension over the housing sector with the subprime loan debacle and its potential to drag down the overall economy.
Thus for the upcoming year–even with a Summer Olympics and presidential and Congressional elections, typically factors that stimulate healthy growth in ad spending–Coen has issued a tempered forecast. He predicts a conservative 3.7 percent gain in U.S. advertising in ’08, which is even less impressive when inflation is taken into account. This 3.7 percent is revised downward from Coen’s estimate in June which forecasted growth of 5 percent in ’08.
He also now projected that while at least there’s growth to be realized in ’08, it’s unlikely that will carry over to ’09, which won’t have the benefit of major business boosters like the Olympics and a hotly contested national election.
Added cause for concern is the failure of the advertising sector to match the growth of the country’s gross domestic product (GDP), which was up 4.8 percent in ’07. Advertising as a percentage of GDP has dropped from 2.14 percent in ’06 to 2.05 percent in ’07. If Coen’s 3.7 percent forecast is accurate for ’08, advertising expenditures in the U.S. would represent a further dwindled down 2.04 percent of the GDP next year.
Yet while the advertising biz is feeling the crunch, Coen said he doesn’t think there will be a recession for Madison Avenue.
Meanwhile there are encouraging signs in an ever evolving landscape. Looking ahead to ’08, Coen projected that the Internet will continue to be a prime medium for ad growth. He predicted ad spending on the web will rise some 16.5 percent next year as compared to ’07. While the dollar figures in so-called nontraditional media are a relative drop in the bucket in the overall universe reported on by Coen, they nonetheless are rising fast and exhibit significant promise.
Overseas ad spending is also on the rise with considerable growth in such countries as China, Brazil and India. Clearly, China figures to continue upwards in ’08 with Beijing hosting the Summer Games.
Coen released his findings last week. He has tracked spending trends for some five decades. His predictions usually are made twice a year, revising prior estimates as well as looking ahead.
L.A. Location Lensing Declines In 2024 Despite Uptick In 4th Quarter
FilmLA, partner film office for the City and County of Los Angeles and other local jurisdictions, has issued an update regarding regional filming activity. Overall production in Greater Los Angeles increased 6.2 percent from October through December 2024 to 5,860 Shoot Days (SD) according to FilmLA’s latest report. Most production types tracked by FilmLA achieved gains in the fourth quarter, except for reality TV, which instead logged its ninth consecutive quarter of year-over-year decline.
The lift across all remaining categories came too late to rescue 2024 from the combined effects of runaway production, industry contraction and slower-than-hoped-for post- strike recovery. With just 23,480 SD filmed on-location in L.A. in 2024, overall annual production finished the year 5.6 percent below the prior year. That made 2024 the second least productive year observed by FilmLA; only 2020, disrupted by the global COVID-19 pandemic, saw lower levels of filming in area communities.
The continuing decline of reality TV production in Los Angeles was among the most disappointing developments of 2024. Down 45.7 percent for the fourth quarter (to 774 SD), the category also finished the year down 45.9 percent (to 3,905 SD), which placed
it 43.1 percent below its five-year category average.
The two brightest spots in FilmLA’s latest report appeared in the feature film and television drama categories. Feature film production increased 82.4 percent in the fourth quarter to 589 SD, a gain analysts attribute to independent film activity. The
California Film & Television Tax Credit Program also played a part, driving 19.2 percent of quarterly category activity. Overall, annual Feature production was up 18.8 percent in 2024, though the... Read More