Bob Cohen, senior vice-president director of forecasting at Universal McCann, kicked off the event, predicting that US adspend in 2001 is headed for a decline of 4.1% to £165.1bn. The forecast also predicts adspend should rise by 2.4% to £168.9bn in 2002.
While Cohen predicted an upturn in next year's economy as a result of the Olympics and political advertising, others wondered where to look for such signs of a trend. WPP CEO Sir Martin Sorrell, who has remained steadfast in his view that the upturn is not around the corner, told delegates that he saw "no rays of sunshine the others have been talking about" in an academic speech touching on issues such as population declines.
Sir Martin noted that airlines, tourism and insurance, all businesses affected by September 11, account for around 1% of the company's revenue. He added that WPP's headcount had been reduced from around 53,000 to 49,500 to reduce costs. Despite the bad news, the WPP chief said he is focusing on growing business in Asia, particularly with China's entry to the WTO, and with web-related projects which he insisted would account for a larger part of the revenue pie in future years.
Viacom chief operating officer Mel Karmazin and colleague David Poltrack, CBS Television's research chief, were both bullish on the ability of network TV to weather the storm. Karmazin castigated rival networks for dropping prices for this year's upfronts, saying: "GE (which owns NBC) and Disney (which owns ABC) sold at lower prices. We felt confident in our line-up. We sold 65% of our inventory at high prices. Our strategy has worked very effectively."
Poltrack said that the network TV scatter market was "remarkably resilient, with prices matching or exceeding upfront levels".
He added that third-quarter TV adspend on the four major US broadcast networks was down 23% on the period last year, while fourth-quarter ad estimates would come in 7% below.
Poltrack told the audience that, should the economy improve slightly in 2002, network television advertising revenues would increase 6%, citing evidence that there had been few 2002 cancellation options exercised.
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