Merrill Lynch Lowers Ad Outlook; Radio Took Big Hit, Online Ads to Grow 30%

Merrill Lynch has downgraded its outlook for U.S. ad spending for 2006 and 2007, lowering its growth estimate this year to 4.7% from 5.1% and dropping its forecast for next year to 2.8% from 3.5%, AdWeek reports.

Merrill Lunch U.S. Ad Spending Growth Estimates

  2006 Prior 2006 2007 2007 Prior
Broadcast TV 5.5% 5.5% -1.2% -1.2%
Cable TV 6% 6% 6% 7.5%
Magazines 2.5% 2.5% 1% 2%
Radio 1.9% 0.0% 1% 2.2%
Internet 30% 30% 22% 22%
Merrill did not change its estimates for broadcast TV, forecasting 5.5% growth in 2006 and a drop of 1.2% in 2007. This year's cable network growth also went unchanged, standing firm at 6%, although Merrill downgraded its prediction for 2007 to 6% from 7.5%. 

Magazines went unchanged at plus 2.5% for this year, while Merrill revised its 2007 forecast to 1% from 2%. Radio took a big hit, as Merrill downgraded this year's estimate to flat from 1.9% growth and dropped its 2007 growth projection to 1% from 2.2%.

Merrill was optimistic about Internet and projected Internet ad growth to soar nearly 30% in 2006 and another 22% next year. Merrill also noted that advertisers are putting some money towards new digital initiatives like mobile advertising, games, and  video-on-demand rather than just online.

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