NYTimes ’07 Forecast: Offline Media Down, Online Media Up

We can try to understand the New York Times’ effect on man. — The Bee Gees, Stayin’ Alive.

One of the reasons I love the New York Times is its confidence to honestly report the decline of offline media, because it knows what it’s doing with online media. After announcing the decline of newspapers, here they are predicting a bad advertising year for offline media — and a great year for online media.

Troubling ’07 Forecast for the Old-Line Media but Not for the Online

The first Monday in October is known in legal circles as the start of the Supreme Court term. Similarly, on Madison Avenue, the first Monday in December has become familiar as the kickoff of the advertising forecast season.

And yesterday a flood of forecasts indeed flowed from analysts and agencies, all generally pointing to a challenging year ahead for the traditional media along with substantial growth for all things online.

Most forecasters are predicting growth in ad spending in the United States next year of 2 to 5 percent over 2006. That would represent a decline from the rate of growth in ad spending this year compared with 2005, which is expected to finish in the range of 3 to 6 percent.

Those who sell ads on Web sites, on the other hand, are likely to be beaming at the high double-digit percentage gains being predicted for them.

“The trend that will continue to affect the media universe in 2007 is the ongoing shift in advertising dollars from traditional media into nontraditional media, most notably the Internet,� Fitch Ratings concluded in an outlook report.

Television, radio and newspapers will “experience slow growth and ongoing audience declines,� according to the report, “and ad spending continues to follow consumer patterns.�

For instance, the Newspaper Association of America is predicting that spending for ads on the Web sites of newspapers will increase a robust 22 percent next year from 2006. But ad spending in the print editions of those newspapers in 2007 will be flat, the association is forecasting, pulled down by a decline in classified advertising and no growth in demand from national advertisers.

An analyst for Credit Suisse, Debra Schwartz, questioned in a report whether even the prediction for an anemic gain of 1.2 percent was “too optimistic.�

A forecast from the Morton-Groves Newspaper Newsletter, issued last week, may be pessimistic enough for her. The publication predicted that ad spending in newspapers next year will fall 2 percent from 2006, a bigger decline than the 1.8 percent it is forecasting for this year compared with 2005.

(For ad spending on newspaper Web sites, the newsletter predicted an increase in 2007 of 23.3 percent from this year, coming after a gain of 34 percent it is forecasting for 2006.)

Another forecaster who does include it within his online totals — Steve King, worldwide chief executive at ZenithOptimedia, part of the Publicis Groupe — offered a prediction that Internet ad spending next year would grow 29 percent from 2006.

By comparison, Mr. King offered forecasts for many traditional media for percentage gains in low single digits like 1.5 percent for local radio and 2 percent for newspapers.

In fact, Mr. King said, he expected online ad revenue to grow at “seven times the rate for traditional ad growth.�

Joey Alarilla also reports the fall of newspapers over at the Philippine Daily Inquirer. The Inquirer also reports the fall of Philippine TV. By contrast, offline media outlets that don’t know what to do with online media often demonize the Internet at every opportunity. Kudos to the Times and the Inquirer for embracing progress.

(Via Steve Rubel.)

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