Strata

And now, a cheery take on 2013 spending

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First quarter is pacing 3 to 5 percent ahead of 2012

First appearing in Medialife Magazine on Jan. 17, 2013 by Diego Vasquez

A number of analysts have predicted either very small ad spending gains this year or slight declines, following a strong finish to 2012 with huge political and Olympic spending.

But according to at least one forecaster, 2013 could be significantly better than 2012.

STRATA,  which produces media buying and selling software and monitors the deals that are made through it, says that the new year has started out stronger than many are forecasting.

“We are already 3 to 5 percent ahead of 2012, which is interesting because there is no political advertising to support the ad economy this year,” says John R. Shelton, president and chief executive officer at STRATA.

“Obviously, the huge political spend came in the spring of 2012 and lasted until election day. But the first part of the year looks to be starting strong.”

Shelton says that although a survey of STRATA media agencies revealed some concern about the impact of the fiscal cliff on 2013 ad spending, the majority of respondents, 65 percent, said it has not impacted clients’ spending at all.

Many buyers think this will be a fairly good year for ad spending based on the strength of several key categories.

He notes that the surge in automotive ad spending seen during the second half of last year has continued into 2013.

Auto manufacturers and dealers are optimistic about 2013 sales, which are forecast at 15 million, up from 14.4 million last year and the best total since 2007.

The long-term outlook is good, too, with 16 million in sales forecast for 2014. That should keep ad spending strong as foreign and domestic manufacturers compete for business among buyers who are willing and eager to spend.

“So far we are seeing the automotive and housing industries stepping up after a few years of weaker spending,” Shelton says.

“These are two key areas that could fill that political spend void. Financials will likely comeback as well as people need to finance these large purchases.”

Indeed, during first quarter, Lowe’s and Home Depot have already bought more ads than they did during first quarter 2012, according to STRATA data.

That’s a new development. The housing industry has been in a funk since 2007, and home improvement stores have been holding back on advertising because of that.

During the first 11 months of 2012, the most recent numbers available from Freddie Mac, home sales rose 9 percent versus the previous year, and similar growth is projected for 2013