Veronis Suhler Stevenson projects total communications spending to increase 5.4% to $923.91 billion in 2008, despite the deteriorating housing market, higher gas prices and a weakening job environment. Radio will post ad declines for the year and broadcast TV will become the largest advertising medium by year-end 2008, the first time in U.S. history that newspapers have not held that position, according to VSS.
Consumer media sectors remain durable as businesses continue to spend on mission-critical services and consumers use entertainment media to relieve economic stress. For example, consumer spending on video rentals rose in the first half of 2008, after declining in two of the past three years. VSS projects home video sales and rentals to increase 6.1% in 2008 to $218 billion.
While some major advertisers, particularly in the automotive and financial categories, have been slashing budgets this year, the quadrennial occurrence of the presidential election and summer Olympics is softening the negative economic impacts on the advertising industry in 2008.
Spending on alternative media will climb 21% to $81.67 billion in 2008, and account for 17.7% of total advertising and marketing spending, up from 6.9% in 2002, according to the VSS Communications Industry Forecast 2008–2012. By comparison, traditional advertising and marketing will inch up only 0.4% in 2008 to $378.48 billion, including a 1.8% decline in traditional advertising, despite the influx of political and Olympics advertising, as newspapers, consumer magazines and broadcast radio all post declines for the year.