The spot-television and cable-network advertising markets are expected to outperform in 2008 while network television will lag, according to a study by TNS Media Intelligence.
The research firm expects total growth of advertising spending to be 4.2% higher in 2008 than in 2007. The second half of the year is projected to be more frothy with a 4.7% rise from 2007. The first half will be up 3.6%.
Within the overall total, spending on spot television will grow by 9.9% in 2008, fueled largely by the spike in political-advertising spending in the presidential, regional and issue arenas, as well as the Olympic Games. That windfall for station operators will be partly tempered by the economic wildcard as key advertising sectors will suffer from a slowing economy, including automotive, financial services and retail.
“There are two advertising markets that are going on next year,” TNS senior vice president of research Jon Swallen said, “the boom part, which is political and the Olympics, and the other is a continuation of comparatively weak performance from the ‘bread-and-butter’ part of the market.”
The writers' strike will be a drag on network television if it lingers deep into 2008, which might translate into a boon for cable networks, according to Swallen.
TNS sees network-television ad spending to be up 2.7% this year while spending on cable-network television is expected to grow 5% in 2008. A protracted writer’s strike could ultimately lead to a downturn in audience ratings on broadcast networks, which eventually impacts ad pricing, Swallen said, and to the extent that there is audience erosion and flight of ad dollars out of broadcast networks, cable stands to pick up at least some of that shift. Also boosting the cable-network numbers is the fact that cable news networks typically see and uptick in audience ratings from election and political coverage.
TNS sees the biggest growth coming from Internet advertising, which the firm expects to be 14.4% higher than 2007, while Spanish-language media will climb 7.8%, outdoor 5.5% and consumer and Sunday magazines 3.6%. Not surprisingly, the laggards include newspapers, which are expected to slide 0.9% in 2008; B2B magazines, 0.1%; and radio growth, which will be 0.7%.