Spot TV, DM Channels Lead Ad Spending Growth: UniversalMcCann

During 2006, U.S. spending increases for both direct mail and the Internet outstripped the growth rate for all advertising. These two channels also beat the increases forecast for the year, according to UniversalMcCann’s Advertising Outlook Update

Direct mail rose from $55.22 billion to $59.91 billion, or 8.5%, while Internet spending jumped from $7.76 billion to $9.32 billion, or 20%. The only other channel that saw similar gains was spot TV, which increased 11%, from $10.04 billion to $11.14 billion.

The spot TV gains, however, came as spending on the four networks did not rise as quickly as anticipated. UniversalMcCann had foreseen a 6.5% increase in spending on the four networks: Actual growth totaled 5%.

Overall spending, on both national and local media in all channels, rose to $285.11 billion, up from $271.07 billion in 2005. The increase was spurred in part due to ads surrounding the Winter Olympics, and spending on a significant number of strongly contested political contests. Next year, absent the political contests and the Olympics, and with the uncertainty of energy prices, there is concern about some “economic softness,” UniversalMcCann’s senior vice president and director of forecasting Robert J. Coen said in a statement.

Consumer media spending by dot-com advertisers continued its march back toward 2000’s level of $5.6 billion: Since dot-com expenditures bottomed out in 2002, at $2.15 billion, they have more than doubled. Between 2005 and 2006 they posted a 20% gain, and will end the year at $4.44 billion.

The automotive industry led the gains in Internet spending. During the first six months of 1999, the top 10 automotive firms spent $117.5 million. Eighty-six percent of that went to television, with the rest allocated to “other.” By the time the first six months of 2006 ended, spending among the top 10 firms had risen to $458.5 million — but only 83% of that was spent on television, and 4% was allocated to the Internet.

According to UniversalMcCann, 2007 holds more of the same trends. Both direct mail and Internet spending are seen as outstripping total advertising spending growth. Overall, total ad expenditures are seen as rising 4.8%, to $298.77 billion. But direct mail should grow 7.5%, to $64.4 billion, and the Internet should vacuum up $10.72 billion, a 15% jump from 2006’s level.