Early this week, U.S. advertising forecasters offered their predictions for the coming year. Robert J. Coen of Universal-McCann said, "Things don't look good, but not as bad as you might fear and will get better, but not next year."
Zenith Optimedia expects 2007 U.S. ad-spending growth to be just 2.5%, down from the 3.7% expansion the company foresaw as recently as last summer. That 2.5% is under inflation, which ran at an annual rate of 3.6% for the first 10 months of this year.
North American ad growth in 2008 is expected to be about 4.1% above 2007. But photographers need to recognize that a big part of this will result in increased spending for the Olympics and the 2008 presidential elections, neither means an additional use of stock photography.
Worldwide spending for newspapers in 2006 was $123,547,000; it's expected to be $124,880,000 in 2007 and $128,410,000 in 2008. Magazine spending worldwide was $54,471,000 in 2006; it's expected to be $56,133,000 in 2007 and $58,310.000 in 2008. While these are increases in actual dollars, both types of use are declining as a percentage of total advertising spend.
Together, newspapers and magazines represented 41.8% of all advertising spend in 2006 and are expected to represent 40.3% in 2007 and 39.1% in 2008. The rest is spent on television, radio, cinema, outdoor and Internet advertising. T he big growth area is the Internet, where spending was 6.1% of the worldwide total in 2006 and expected to be 7.5% in 2007, 8.7% in 2008 and 9.5% in 2009. ZenithOptimedia expects the advertising revenue from Internet use to be greater than the revenue generated by magazine ads in 2010.
Those Internet numbers break out to be $25,952,000 in 2006, $33,723,000 in 2007 and $41,638,000 in 2008. Internet advertising spend was 48% of magazine spend in 2006 and will be 60% in 2007. It is expected to be 71% in 2008. The Internet uses a lot of still photographs, so in theory, the number of uses lost in magazines may be replaced by additional uses on the Internet.
The greater worry: fees paid to use an image on the Internet have been estimated to be about one-tenth of fee to use the same image in print. As micropayment gains much more traction in this area, the average fees are likely to drop. It is far from a zero-sum game.
Thus, while advertising revenue in general might fulfill Coen's "not as bad" prediction, Â the situation for still photographers trying to sell images for ad use might be worse than anticipated.
The fastest-growing ad markets are: Serbia, Qatar, Kazakhstan, Egypt, UAE, Russia, Ukraine, Moldova, Belarus and Romania.
Steve King, CEO of Zenith Optimedia, said that in making forecasts these days you need to split the world into two parts: the industrialized world, which will continue to see sluggish spend, and emerging advertising markets, like China, Russia, India, Mexico and Brazil. He sees the Asia-Pacific region, not including Japan, as the leading advertising growth area.
Finally, Anthony Noto of Goldman Sachs told Reuters that he believes there is a 50-50 chance of a recession in the U.S. in 2008. If that happens, he says ad revenue at traditional media companies could fall as much as 10%.