Studies Reveal No Katrina Impact

By Joe Mandese -- Broadcasting & Cable, 9/12/2005

Two of Madison Avenue's top firms—media-buying agency Carat and ad-tracking firm TNS Media Intelligence—have released revised outlooks that see U.S. ad spending growing 4%-5%.

Neither factored the storm's devastation of the Gulf Coast states or its impact on the nation's oil-sensitive economy into calculations. Carat predicts that U.S. ad spending will rise 4.5% this year, unchanged from 2004. TNS, which monitors spending but does not forecast growth, says it rose 4.5% through the first half of this year.

The findings suggest that, as severe as natural disasters are in terms of human toll, they are relatively benign in terms of the media economy. Carat's global forecast notes that, a year after the tsunami devastated Asian coastlines, the continent has emerged as the fastest-growing advertising economy in the world and is poised to become larger than Europe's advertising marketplace by 2008.

The relatively neutral impact of natural disasters comes in stark contrast to man-made ones, such as the 9/11 terrorist attacks in the U.S. and the transit-system bombings in London, which had chilling effects on advertisers.

In fact, the most influential factors in advertising growth continue to be the Olympics and politics.

While the forecasters agree on what's influencing advertising growth, they differ on the media most affected. Carat says the main stimuli continue to be digital interactive media, especially online, which are beginning to displace traditional advertising media such as TV and print. TNS, as well as a recent report by Nielsen's Monitor-Plus division, says online ad growth is strong but lags that of some traditional media, including cable TV.

Says Robert Lerwill, CEO of Carat parent Aegis Group, “Television's share of advertising spend is leveling out, and newspaper's share of advertising is declining, with budgets shifting to the Internet.”