Starcom MediaVest’s Media Futures update anticipates growth revised down to a 2% decline

Advertisers have revised down initial predictions of a 2.6% increase in spend in 2014 to a decline of 2% in overall spend, according to Starcom MediaVest’s Media Futures mid-year update.

The majority of this shift is expected in the second half of the year where advertisers predict a year-on-year spend reduction of -3.8%. The first half of 2014 was almost flat, with a -0.3% decline in spend recorded by advertisers in the survey.

The report found that a quarter of advertisers have seen their ad spend increase year-on-year to date, however the majority of advertisers have either seen a decrease or no change to their ad spend for the first half of 2014.  That trend looks set to continue into the back half.

Starcom MediaVest CEO Chris Nolan (pictured) said the correction in anticipated expenditure was unusually large.

Says Nolan: “We often observe mid-year corrections, however, this correction is unprecedented.  It appears to correlate with a significant decline in the May consumer confidence levels. ” Nolan said. “It’s worth noting that the Federal Government budget was also released in May.”

The decrease in spend is most likely to impact FTA TV but advertisers will also spend less on most media across the board in the back half of 2014, including online media.

Nolan said anticipated spend on owned and earned media, including social media, is still expected to rise and is in line with the annual survey.

Says Nolan: “Advertisers have downgraded their growth expectations for owned and earned media from +7.8% to +4.9% for the mid-year update.

“In line with the annual survey, owned and earned media still accounts for almost 50% of advertisers’ time and effort spent on media activities, which we estimate is significantly higher than its share of spend.”

Among advertisers who have increased their spend year-to-date, television and magazines were the main media to see that increase. However, these media were also the media where spend was reduced among advertisers who have decreased their spend, as well as paid search/SEM.

Only 13% of advertisers expect their second half ad spend to reflect an increase on the same period last year. While 42% expect no change, a decrease is expected by 38% of advertisers.

44% of advertisers who expect their ad spends to decrease in the second half of 2014 versus the same period last year indicate the decrease will be more than they anticipated at the beginning of the year.