Report: US advertising spend to improve in 2012

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Total U.S. advertising spend is expected to increase 2.7% to $152.1 billion in 2012, according to a forecast conducted by research firm Strategy Analytics. A Strategy Analytics statement described the jump as “significant improvement.”

This growth is led by online advertising, expected to grow 6.7% to $27.4 billion. Strategy Analytics anticipates 3.7% growth in television ads, 2.9% growth in “traditional formats” which include cinema, print, and out-of-home advertising. The firm expects print advertising to decline 1.5%.

Leika Kawasaki, an analyst at Strategy Analytics's digital media strategies practice which compiled the forecast, said the takeaway is “advertising is moving to online. We see clear online growth over traditional print advertising, which is shrinking in the US.”

Overall growth in advertising spend can be attributed to “major global-impact events” such as the Olympics and the US Presidential Elections, said Ed Barton, Strategy Analytics's director of media strategies, in a statement.

Strategy Analytics splits online advertising revenue into two broad categories: search ads and classifieds and display ads, both of which account for approximately 50% of the firm's online advertising revenue forecast. Mobile advertising is not included in the forecast and is covered by Strategy Analytics's Wireless Media team.

The print advertising figures assembled by Strategy Analytics includes magazine and newspaper spending. Direct mail spend is not included in the forecast. 

Looking ahead, Kawasaki sees no major shifts in the role of print ads, despite a decrease in overall revenues. She points to the fact that the watershed has already occurred. “The major structural shift was in classifieds and other locally targeted campaigns shifting almost completely to online media outlets and that has largely happened already,” Kawasaki said. “Print spending in newspapers tends to be dominated by retailers looking to drive store traffic and this will come under increasing scrutiny as levels of readership continue to decline. There are bright spots in emerging markets where literacy and readership are rising however spending volumes cannot compete with what is being lost in more mature markets.”

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