TNS Media Intelligence has lowered its year-end advertising growth forecast to increase by 1.7 percent to $152.3 billion, after reporting weak advertising growth for the first quarter. The ad tracking research company had earlier anticipated advertising to grow by 2.6 percent for this year compared to 2006. The marketing-information company was forced to revise its projection after it received the actual spending figure for the first quarter of this year, reflecting a weaker-than-expected market. TNS CEO Steven J. Fredericks has said that an upward looking activity should pick up to some extent in the second half of the year, however it seems that total calculated spending will post their weakest annual growth since the ad recession set in 2001.
Following a lethargic economy, fragile spending from key advertisers, including automakers and competition from other less costly media outlets such as the Internet have also stressed ad expenditure. However, the fall in expenditure is largely credited to a reduction in spending on traditional media in favor of less expensive digital initiatives. Nevertheless, Internet display advertising is expected to record the sharpest rise in spending for 2007 at 16 percent, TNS said, as more firms are guiding their ad spending to online media in an attempt to reach younger consumers.
TNS Media Intelligence President Steven Fredericks said in his prepared statement, ‘the advertising market has moved into a slower track than we thought possible just six months ago.’ However, few sectors are likely to remain competitive, even if not strong enough to counterbalance sluggish environment, such as telecom, prescription drugs and direct response advertisers.
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