Both broadcast and cable TV operators are projecting strong results through the end of 2010. Janney Montgomery Scott analyst Tony Wible analyst says that broadcast finished the 2^nd quarter with a 5.9% increase over last year. And cable saw revenue growth of 13.4%. Wible also pointed out that while the scatter market was bringing rate increases of up to 15-20%, the “upfront deals may provide an 8%-9% pricing increase base to grow off with the start of the new broadcast season.”

Cable networks have indicated such a strong interest in their media space that up to 99% of 3^rd quarter inventory had been sold by mid-August. A similar picture is expected for the 4^th quarter. One driver of demand has been financial-services companies looking to reach families and students before they head out to college campuses. In addition, auto manufacturers are rolling out more models this fall – up to 60 new models “compared to only 30 last year” writes Clair Atkinson for the New York Post. The increased activity in the automotive sector may explain the strong demand for spots in the sports space.

There’s  some uncertainty about which way the economy is headed as we approach year-end and 2011. But to avoid paying higher rates in the 4^th quarter, marketers might be making their year-end purchases now. Regarding  the economy, David Levy, chief of Turner Broadcasting’s ad sales, says “[p]eople still have to sell their product.” This is especially true during the all-important holiday season.

[Sources: Atkinson, Claire. Top-tier cable see ad boost. New York Post. 19 Aug. 2010. Web. 3 Sept. 2010; Szalai, Georg. TV ad sales looking solid for second half. HollywoodReporter.com. 19 Aug. 2010. Web. 3 Sept. 2010]

Small and medium sized businesses (SMBs) know they need to advertise to increase sales. But the amount of money SMBs allocate for advertising and the way the budget is distributed across media channels varies significantly. In a recent study, BIA/Kelsey identified a separate group called SMB Plus Spenders.

Here’s a profile of ad spending by these SMBs.

• Spend at least $25,000 a year on advertising/promotion
• Maintain a website: 90%
• Allocation to online spending: 26%
• Allocation to broadcast media: 16.1%

The Plus Spenders devote more money to advertising than the typical SMB which reports annual budgets that range from $2,000-$3,000. And the typical SMB only spends 21.8% of the total budget on online formats and 1.3% on broadcast media.

Another key difference between typical and Plus Spenders in the SMB universe is the number of media formats used. Most SMBs use 3.1 media formats for advertising. The Plus Spenders employ 6.5 different media formats. Steve Marshall, BIA/Kelsey research director says “SMB Plus Spenders are more performance-oriented in making their media purchase decisions and do a considerable amount of lead tracking.”  As the Plus Spenders group finds  success in their ROI for marketing expenditures, other SMBs may take notice and begin upping their ad budgets as well.

[Source: “Higher-Spending SMB Advertisers Use Diverse Media Mix.” BIA/Kelsey.com. 24 Aug. 2010. Web. 31 Aug. 2010]

The ad market has been slowly recovering this year. Many analysts expect to see stronger growth in 2011. This includes Borrell Associates which has just come out with its 2011 forecast. The research concern is predicting a total U.S. ad market of $238.6 billion in 2011 which represents an increase of about 5% over this year.

Borrell analysts say their numbers point to a nearly 14% jump in online ad spending. The growth rate would bring the sector to $51.9 billion next year.  And local online ad spending will surge by 18% or to $13.7 billion, meaning that over $1 out of every $4 spent on online will go to the local market.

How will various components of the online ad world fare next year? According to Borrell, the market could look like this:

• Targeted display (+60%)
• Run of site display (-14%)
• National paid search (-11.3%)
• Email ads (+9%)
• Streaming video (+60%)

Borrell analysts also point out that online promotions have not traditionally been the focus of as much spending as online advertising.  But they are looking for the online promotions market to reach $24 billion in 2011. Growth in online coupons largely explains this increase.

In summary, Borrell says, the fastest-growing segments of online advertising are the local sector, anything targeted, and everything involving social media.

[Source: 2011 Online Ad Growth to Outpace Total Ad Spend Growth. BorrellAssociates.com. 23 Aug. 2010. Web. 24 Aug. 2010]

Digital out of home advertising continues to draw money and interest. By now, commuters are used to seeing digital advertising via billboards. This type of billboard may become more common after several recently released reports have shown no link between an increase in traffic accidents and digital billboards. And since the advent of digital billboards, the entire digital out of home (DOOH) market has expanded to include TVs placed in venues that draw foot traffic.  Where is this market headed?  Adcentricity’s recently published review can provide some insight.

Adcentricity executives have acknowledged an uneven advertising market rebound in 2010, especially for a new format like digital out of home (DOOH). But a couple of key trends have emerged based on their business experience. To begin, specific market segments have shown interest in DOOH. In  Q3 this year, the following sectors are expected to be most active in DOOH:

• Financial services
• Automotive
• Telecommunications
• Electronics, appliances, furnishings
• Healthcare

These trends support the assertion recently made by Michele Strazzera, Deputy Managing Director, Nielsen Global AdView who said, “We’re seeing advertisers regain confidence again especially in financial services and automotive industries, which were two of the hardest hit sectors during the recession.”

In addition, marketers have been showing interest in a variety of venues for possible advertising campaigns. Based on RFP activity, Adcentricity analysts expect marketers to purchase space in the following places during Q3 2010:

• Convenience stores
• Hospitality: Restaurant bars
• Airport: Club lounges
• Grocery: Check-outs

Company analysts have noted a drop in interest for doctor and medical offices in the past couple of months. They believe this decrease is the result of a long sales cycle and they expect demand to increase once clients such as pharmaceutical firms are educated about the benefits of DOOH advertising. Analysts are also seeing growing interest in general office venue.

While specific sales levels for DOOH advertising have not been released, Adcentricity’s data point to growing interest in the sector.

[Sources: Engineer: Digital billboards Not Linked to Accidents. OAAA.org. 17 Aug. 2010. Web. 23 Aug. 2010; Mandese, Joe. Digital OOH Market Expands. MediaDailyNews. 11 Aug. 2010. Web. 23 Aug. 2010; Q2 Digital Out-of-Home Market Review. Adcentricity.com. Web. 23 Aug. 2010]