By: Lucia Moses
With plenty of caveats thrown in, forecasters today called for modest gains in newspaper ad spending in 2003, with outlooks ranging from 3.2% to 6.1% growth.
Next year will be “not a boom but better than ’02,” predicted veteran forecaster Robert J. Coen of Universal McCann, who continued a long tradition of year-end prognostications at UBS Warburg’s 30th Annual Media Week Conference. Coen called for local newspaper and total local advertising to each rise 4.5% in 2003, and national advertising to grow 6% in newspapers and 5.3% overall.
Forecasters said the industry’s performance will hinge in part on what happens in the all-important help-wanted category, which has been a primary profit driver.
“I think it’s just about hit bottom,” Coen said. “It can’t get much worse.”
James Conaghan, the Newspaper Association of America’s economist, foresaw industry ad revenue growing as much as 6.1%, assuming a strong comeback in the labor market that drives help-wanted.
Under less rosy conditions, he sees ad revenue advancing only 3.2%. But Conaghan said recent improvement in initial jobless claims and monthly newspaper ad revenue trends give him cause for optimism. He also cited newspapers’ investment in help-wanted classifieds, and said the kinds of jobs that will drive hiring in the future tend to benefit newspapers.
Also lining up on the bullish side, newspaper economist Miles E. Groves of the Barry Group consultancy called for 5.69% industry ad revenue growth next year, also depending on a help-wanted resurgence.
It was another humbling time for forecasters, who revised down their 2002 predictions. Coen, who at the start of the year had called for 1.5% growth in local newspaper ad revenue in 2002, now puts it at 0.1%; Conaghan revised down his forecast from 0.6% to 0.2% growth; and Groves changed his outlook from up around 2% to down 0.47%. Referring to last year’s predictions, Groves said, “I was way off the mark.”
Groves was surprised at newspapers’ share of total ad dollars dropping to 19.5% in 2002, below the psychologically important 20% level. Help-wanted was again one of the drivers, as newspapers lost a major chunk of revenue not enjoyed by all other media.