As we roll into a new year, it's always a good idea to check out the economic forecasts and marketers' investment intentions for the months ahead. So here are the stats from economic and advertising industry authorities for your review as you tweak 2012 marketing investment plans.
2012 Economic Bright Spots
Economic growth forecasts for 2012 as measured by the broadest gauge, real Gross Domestic Product, are all in the low range and most fall short of the 2.5% to 3% pace needed to keep unemployment in check:
If forecasts come true, 2012 growth will be a bit faster than the very modest 1.8% pace experienced in 2011. Drilling down, the U.S. Department of Commerce forecasters expect retail sales to grow by 6%, business spending to grow by 12%, and inflation to hold at 2%. Unemployment will still hover at an undesirable 8.5% and housing prices will not be improving much from the drastic 33% drop since 2006.
Some forecasters believe that consumers are finally starting to open their pocketbooks after four years packing away savings to restore wealth lost to the housing crash and cratered stock market. (Between December 1st and December 24th, consumer retail spending rose 4.7% over the same time period in 2010, according to ShopperTrak research. Consumer confidence also rose to 64.5 in December 2011, which is 10 points higher than November's consumer confidence level according to the Conference Board.)
And businesses are becoming a little more bullish adding jobs and investing in new equipment. (Investment in buildings, equipment and software grew 8% in 2011.) But it goes without saying that the economy is still in a fragile state and a sustained recovery is still not underway after the proclaimed end of the Great Recession some two years ago. And the ripple from the European downturn could erode the economic pace in the U.S.
U.S. Ad Spending Rebounding
MagnaGlobal division of Interpublic is predicting that the quadrennial boost from election and Olympics advertising will ensure stronger 3.7% growth despite a still-weak economy and a slowdown in ad momentum late in 2011. That would bring total U.S. ad spending to $152.9 billion. The company expects a record $3.1 billion boost from political and Olympics spending, including the highest-ever political spending with $2.5 billion just for TV.
ZenithOptimedia forecasts a slightly more moderate 3.5% growth in U.S. ad expenditures in 2012, versus a 2.2% increase in 2011. This outlook is in part the result of strong U.S. retail sales, which grew 7% in October and got a booster shot from record Black Friday sales of $11.4 billion. According to Zenith, in the U.S. in 2011, the largest increases in spending were in Internet (12.6%) and cable TV (12.0%). For the same period the firm reports decreases for newspapers (-8.5%), business magazines (-4.0%), network TV (-2.0%) and syndication (-4.0%). Marketing services grew by a modest 1.9%.
Online Ad Revenues to Pass Print in 2012
According to a recent report from eMarketer, U.S. online advertising spending, which grew 23% to $32.03 billion in 2011, is expected to grow an additional 23.3% to $39.5 billion this year−pushing it ahead of total spending on print newspapers and magazines, according to eMarketer. Print advertising spending is expected to fall to $33.8 billion in 2012 from $36 billion in 2011.
B2B Ad Spending Following Online Trends
According to BtoB Magazine's "2012 Outlook: Marketing Priorities and Plans," 40.8% of b2b companies will boost their marketing budgets this year, despite being beset by continued economic woes and global turmoil; 48.4% will keep their budgets flat; and 10.8% will cut back .The online survey of 343 b2b marketers also found that they are planning to shift spending into lower-cost online and social media programs with 74.0% of marketers planning to increase their online spending. The top online spending areas will be websites (cited by 67.6% of marketers), email (67.5%), social media (64.3%), search (54.8%), video (50.5%) and webcasts/virtual events (45.6%). The top applications identified for social media are brand-building (82.6%), lead generation (51.4%), thought leadership (47.4%) and customer feedback (39.5%). The survey also found that in 2012, 41.4% of marketers will raise their event spending; 36.5% will increase direct mail; and 20.1% will boost print advertising. On the down side, 22.4% of marketers plan to slash their print advertising this year; 13.4% will cut back on direct mail; and 12.1% will decrease event marketing spending.
Parallel Paths
At JMG our predominately b2b clients are taking a more bullish outlook with marketing investment plans that generally parallel the BtoB Survey findings: carefully calculated increases, flat spending in print, more emphasis on digital, social, trade shows and experiential events. So what is your crystal ball telling you about 2012, and how has it impacted your marketing investment planning for the year?