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Ad spending off estimated 4%

2001 decline is worst since World War II; forecaster sees network losses recouped in '02 12/09/2001 07:00:00 PM Eastern

The 2001 ad-spending decline in the U.S. is the worst single-year downturn since World War II, according to Universal McCann's top advertising forecaster, Robert Coen.

He, like most other prognosticators, certainly didn't see it coming a year ago, when he projected a nearly 6% increase in spending. Now it appears that national spending will be down 4% for 2001.

Total U.S. ad spending will be about about $233.7 billion this year, he said. For 2002, he predicts a slight uptick, 2.4%.

In 2002, the four major networks, he predicts, will grow a combined 3.5%, to $15.8 billion, about where they were in 2000.

National spot, spurred by political spending, should grow 5% next year, to $10.3 billion. That's after a 20% plunge this year.

Cable should grow 5.5% to $12 billion, after a 4% gain this year.

Local television will grow 4% next year, to $13.8 billion, after this year's 5% decline.

Local radio spending will rise 2.5%, to $14.7 billion, recouping much of this year's 3% drop. National radio will fall 1%, to $3.6 billion, after an 18% drop this year.

Coen made his predictions at the UBS Warburg media conference in New York, where David Poltrack, CBS's top researcher, forecast a much rosier, 6% increase for network television, citing the relatively strong fourth-quarter scatter market and the low level of 2002 cancellation options being exercised by network advertisers.

First quarter '02 gains will be driven by the Olympics, he said. Second quarter should be at least flat. The third quarter will look good compared with this year's, when the Big Four lost close to $500 million in advertising canceled and expenses incurred in covering the terrorist attacks.

Next year's fourth quarter will depend on the spring's upfront market, he said, adding that fourth quarter '01 indicators suggest the upfront will be significantly better—for sellers—than this year's.

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