Despite talk about a possible recession, analyst Michael Nathanson of MoffettNathanson Research says the advertising ad economy feels healthier than the headlines suggest.
In a new report Tuesday, Nathanson said he Ad Tracker shows that advertising spending in the second quarter of 2019 was up 11%. Digital advertising was up nearly 20% and traditional advertising was flat--including flat growth in national TV spending.
“If the economy is on the brink of a recession, the strong demand in the TV scatter market--as seen in massive CPM inflation--would be an unusual and atypical data point,” he said.
The biggest difference between digital and TV advertising is the buyers. While national TV buying is concentrated among the top 100 advertisers, who represent 71% of the national broadcast market, digital advertising is being bought by a huge number of small- to medium-sized companies.
For the full year, Nathanson has improved his forecast for total national TV spending to a 0.4% increase to $8.928 billion. He sees broadcast revenue dropping 1% to $3.245 million, a slightly bigger drop than the 0.6% decrease previously forecast, and cable increasing by 1.3% to $4.701 billion, up from the earlier forecast of a 0.7% gain.
Among individual media companies, Nathanson upgraded his ad revenue forecast for Fox and ABC among the broadcasters and the cable network units of Disney, Viacom, NBCU and Discover.
Nathanson sees internet ad revenue for the year increasing 21.5%, unchanged from his earlier forecast.
Overall ad spending for 2019 is expected to decline 3.8% to $121.872 million, which is a smaller drop than the 5.1% forecast previously.