AD SPENDING COULD BE WEAKEST SINCE 2001
By HOLLY M. SANDERS

$LOWING SALES: In January ad growth for this year was projected
to be 2.6 percent. Now expectations are lowered to 1.7 percent growth over 2006 spending.June 13, 2007 -- After a bad start to the year, Madison Avenue is bracing for even worse news: Advertising spending in 2007 is expected to be the weakest since the ad recession in 2001.

Ad tracker TNS Media Intelligence predicts U.S. ad expenditures will grow just 1.7 percent to $152.3 billion, down from a previous forecast of 2.6 percent.

"Take two aspirin and wait for 2008," said Jon Swallen, senior vice president and director of research at TNS.

Swallen and other forecasters figured that ad spending would be down compared with last year, which had the double boost of the Olympics and election spending.

Still, TNS was forced to revise its full-year forecast after ad spending in the first quarter fell short of expectations.

"Spending through the first three months contracted at an even faster rate than we expected," Swallen said. "I'm coming up short on even my most pessimistic forecasts."

Swallen said marketers are being cautious, especially local advertisers that are sensitive to economic conditions and tend to pull back on advertising when faced with uncertainty.

The drop in dollars also reflects marketers that continue to shift their ad budgets away from traditional media such as TV toward less expensive digital alternatives including the Internet.

Television is a mixed bag. While ad spending on cable networks is expected to rise 5.9 percent, network TV expenditures will increase by just 1.3 percent. Without the Olympics-election combo, spot TV spending is expected to fall 5.5 percent.

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