INSIDE RADIO: Pivotal Adjusts 2018 U.S. Ad Forecast Up 1.8 Points To +4.5%.

Good news for the U.S. advertising landscape from influential Pivotal Research Group, which provides Wall Street the real deal when it comes to consumer trends. It is upgrading expectations for ad growth in 2018, with +4.8% expansion following +4.5% growth in 2017. Writes analyst Brian Wieser, “Although rising levels of inflation are a factor, healthy personal consumption expenditures are evidently the main factor.”

For the uninformed, what Wieser writes has great influence in the media and advertising industries. Advertising Age wrote last year, “While he may go unnoticed at industry events, his analyses are anything but unheeded. When Pivotal Research analyst Wieser speaks, everyone from small investors to holding company titans like WPP’s Martin Sorrell listen. His recommendations and reports can lift or sink an advertising or media company stock.”

Offering new perspective on key trends and forecasts for the year, Wieser wrote to investors Wednesday, “2017 was a stronger year than initially expected, and now having reviewed 1Q18 results, by all current indications 2018 is looking like it is growing faster than previously expected.”

The revised growth estimate follows his original forecast of a 3.0% expansion in U.S. ad spending, which he released in November 2017 and reaffirmed in March. The new +4.8 ad growth estimate in mid-May represents a marked increase of 1.8 points, which he says demonstrates “the fastest pace since the period preceding the global financial crisis.”

Looking at categories, Wieser pointed to the strength of ecommerce and “the emergence of direct brands who sell products and services to consumers without physical retail intermediaries.” Adding to his forecast, Wieser wrote, “Looking solely at newly emerging independent direct-to-consumer apparel and packaged goods brands, we estimate that there will be $20-25 billion of consumer spending this year and perhaps $1-$2 billion in ad spending, mostly on digital media.”

And eyeing media, he forecasts nearly +20% growth for digital advertising, leading it to account for 47% of all advertising during 2018. Television will grow +2% for the year, while print will continue to decline, as outdoor remains stable. While radio was “likely down mid-single digits in the quarter,” Wieser believes it will remain “durable even as digital grows, given (its) unique attributes as a marketing vehicle and advertiser base.”

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