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Internet a standout performer

By Julian Lee | smh.com.au | 11 April
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Advertisers spent a touch over $13 billion in the mainstream media in 2007, with the internet again emerging as the standout performer in a year that delivered strong growth, official figures released yesterday show.

Advertising in magazines, newspapers, on television, radio, the internet and posters and in cinemas rose by 11.5 per cent in the 12 months to December 31, the Commercial Economic Advisory Service of Australia said. It noted that the spate of political advertising in the run-up to the federal election helped fuel the growth.

The march of new media represented by the internet and pay-TV continued, although old media, such as metropolitan newspapers, free-to-air television, radio and cinema, all turned in stronger performances than expected.

Posters, for example, grew faster than the overall market, mainly due to the continued boom in bus shelter and street furniture advertising. Regional weekly newspapers also grew at a faster rate than the market.

But the figure for suburban newspapers was distorted because in 2006 the service was forced to guess the total when some newspaper groups, believed to be Courier newspapers, refused to disclose their revenue.

Ownership of the newspapers, which includes the lucrative eastern suburbs title The Wentworth Courier, has now passed from the secretive Hannan family to News Ltd, leading to greater disclosure.

Media analysts were pleased with the result, one of the strongest in recent years. The managing director of Fusion Strategy, Steve Allen, who stakes his reputation on predicting market growth each year, forecast 10.28 per cent for 2007. He said growth was driven by the continual drift in ad dollars online and a strong television market.

"Television had a very strong year; even newspapers were stronger than we thought they would be. In fact, everyone had a respectable year," Mr Allen said.

The chief executive of Aegis Media, Lee Stephens said he was surprised by such a "robust result. The media has had a pretty good run for the past few years". His group had predicted 10 per cent growth last year.

But the same analysts are now trying to forecast growth as talk of recession in the US and Europe bites. US-owned companies account for about 35 per cent of media ad spending in Australia.

Citigroup has revised its forecast for the current financial year down from 8.7 per cent to 6.4 per cent, trailing off to 5.6 per cent growth in 2009 and contracting by 1.1 per cent the year after that.

Mr Allen stood by his bullish forecast of 8.15 per cent for calendar 2008. "We are always at the high end," he said. "But then every analyst is trying to get the prize for being the most bearish. There's a not a single forecast that has not been revised down."

Mr Stephens said the market for the rest of the calendar year would be buoyed by strong bookings on free-to-air TV and the internet.

First published by Smh.com.au on April 11 2008
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