Merrill Lynch: Online Advertising Is The Bright Spot

Lauren Rich Fine, an advertising and publishing analyst for Merrill Lynch, last week predicted advertising spending will continue to decrease in the last part of 2006 and also in 2007. However, a big exception to this downturn is Internet ad spending which Fine expected to grow 30 percent this year and 22 percent next year (Adweek).

There was some concern in the marketing community a few weeks ago when Yahoo reported weaker ad demand and lower third quarter revenues as a result. Based on the new Merrill Lynch forecasts, the Yahoo hiccup appears simply to be a one-time anomaly.

According to the analyst’s projections, here are the predicted increases in major media ad spend for 2007:
Magazines: 1 percent increase
Broadcast TV: 1.2 percent decrease
Cable TV: 6 percent increase
Radio: 1 percent increase
Internet: 22 percent increase

Factoring in the rate of inflation, the only place there will be appreciable growth in the next 15 months will be on the Web.