CMR Sees Online Ad Rebound

The beleaguered online advertising sector is poised for a major rebound in 2002, with anticipated growth far outstripping other mass media, according to ad market researcher CMR.

The New York-based research group, a unit of Taylor Nelson Sofres, predicts that Internet advertising will see the strongest return of all media, with 8.8 percent growth for all of 2002.

That’s compared to an expected 1.5 percent upswing in overall media spending, from an estimated $94.6 billion in 2001 to $96.1 billion.

Newspapers, expected to be the second fastest-growing medium in 2002, will see only a 3.1 percent increase from 2001. Network and spot television, meanwhile, will see an approximate 2 percent to 2.5 percent increase, while magazines will grow by 0.6 percent during the year.

In addition to highlighting online media as the advertising industry’s brightest star, CMR said its findings suggest that the worst is now in the past, for all types of mass media.

During fourth quarter, the entire advertising industry saw a decline of 14.4 percent — representing the greatest quarter-to-quarter decrease in ad spending during the current recession. After that, the advertising market’s downward momentum should slow gradually until third quarter, when it finally sees growth of 3.8 percent, according to CMR.

Overall, 2001 will have seen a 9.4 percent decline from $104.5 billion in 2000, according to CMR’s figures — making the industry’s annual performance its worst during the past ten years.

“Looking back on 2001, the advertising industry felt the adverse effects of a souring economy, which took ad spending into the greatest slump we’ve seen in years,” said CMR president and chief executive David Peeler. “The events of September 11, coupled with the state of our economy, certainly accelerated advertising’s continued decline for the remainder of the year. As our nation emerges from recession, we believe the worst is behind us and expect to see a slight industry rebound by the onset of the third quarter of 2002.”

CMR isn’t the only one predicting that the Internet will top other media in making a comeback during 2002. Longtime ad market forecaster Jack Myers also pointed to online media’s growth in the coming year, with a 10 percent increase from 2001. At the same time, the entire advertising market will post a 1.7 percent decline, according to Myers.