Ad Confidence Index Shows Stable Outcome For 3Q 2001.

Jack Myers, chief economist for Myers Reports, Inc., announced new research suggesting that the economic slump in the media industry may have bottomed out, although a recovery remains 18 months away. According to Myers, the company’s third quarter Advertising Confidence Index (ACI) shows a slight increase from March, indicating stabilization in media budgets, following a 24 percent drop in the ACI between December 2000 and March 2001.

The Advertising Confidence Index, compiled quarterly by media industry economic researcher Myers Reports, is based on a survey of 152 advertiser and ad agency executives responsible for media planning or buying decisions. It is a weighted number derived from the percentage of those executives who said they plan to either increase, decrease or maintain their overall media spending plans over the next 12-18 months.

For the third quarter, there is a far greater degree of confidence in the growth of direct marketing and consumer and trade promotion, which rate a confidence index of 65.9. Nonetheless, the direct marketing and consumer and trade promotion confidence index was higher in March, at 66.1, and in December 2000, at 72.4. Myers’ promotion index includes assessments of seven promotion and direct marketing categories.

“Based on the results of the third quarter ACI,” said Myers, “we are not revising our media spending forecasts for 2001 and 2002, which we published in May. The Myers forecasts reflect a slightly more negative outlook than the spending projections recently released by Universal McCann’s Robert Coen. While Coen dramatically downgraded his projections for several media from his original 2001 forecast, issued in December 2000, his updated numbers are consistent with Myers’ projections for several media.”

For all consumer media in 2001, Myers projects an overall decline in media spending of 1.5 percent, and an increase of 0.2 percent in 2002. Coen’s numbers for 2001 and ’02 are +2.5 percent and +5 percent, respectively. However, Coen includes direct marketing revenues in his forecasts, which Myers excludes. Without direct marketing growth incorporated, Coen’s adjusted forecast for 2001 would be +1 percent.

While the ACI shows stabilization in media spending plans, it appears that a recovery is still nearly 18 months away, according to survey respondents.

Average number of months for media economy recovery: 17.5

10.1 of respondents do not think we are heading into an economic downturn for the media industry.

Source: Myers Reports Advertising Confidence Index

For more information at http://www.myers.com/

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