veronis forecast

Internet and mobile devices are among the marketing channels likely to get most attention from marketers over the next five years, say analysts at Veronis Suhler. Mobile advertising aside from texting will grow 33 percent, while mobile advertising and content tied to broadcast style TV will grow 33.5 percent. 

Mobile gaming and advertising activity will grow 46.2 percent while Internet and mobile home video downloads will grow 34.4 percent.

Also among the fastest-growing channels are paid product placement, with a compound annual growth rate from 2008 to 2013 of 17.6 percent; e-mail marketing and in-game advertisements, both of which are expected to grow 18.5 percent.

Word-of-mouth marketing and public relations (with a 9.2 percent compound annual growth rate from 2008 through 2013), branded entertainment (9.3 percent) and the other places marketing spend will grow, at the expense of more-traditional channels, say researchers at Veronis Suhler. 

The latest forecast indicates that advertising is a decreasingly important part of the marketing mix. 

“What’s really stark is that advertising, which not so long ago was the biggest part of the overall pie, is now the smallest part of the pie and is shrinking at a pretty good clip,” said James P. Rutherfurd, executive vice president and managing director of the firm.

In 2009, communications spending is likely to show a one percent decline for the year, the first notable decline in at least four decades, says Veronis Suhler Stevenson. In five years, advertising spending in magazines will “rebound” to $9.8 billion, but will be nowhere near the $12.9 billion spent on that channel in 2008. And by 2013, the video game market will be almost the size of the shrinking newspaper industry.

Advertising, as is clear by now, is contracting. Spending dropped 2.9 percent in 2008, to $210 billion. For 2009, Veronis Suhler expects advertising to end up declining 7.6 percent, with a one percent decline to follow in 2010. But advertising will again grow in 2011. 

The segments where advertising will decline most rapidly in 2009, according to the firm’s estimates, are newspapers (down 18.7 percent, to $35.5 billion); consumer magazines (down 14.8 percent, to $11 billion); radio (down 11.7 percent, to $15.8 billion); and broadcast television (down 10.1 percent, to $43.0 billion). Veronis Suhler expects a few sectors to increase their advertising dollars this year, including mobile (up 18.1 percent, to $1.3 billion) and the Internet (up 9.2 percent, to $23.8 billion).

Even assuming an economic recovery over the next five years, “newspapers, consumer magazines, TV and radio are shrinking and will not, in that period of time, get back to what they saw before,”the firm predicts.

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