Ad spending to end 2010 on uptick. Modest growth projected for 2011

More ways to reach consumers. Harder to connect with them.

Up, down and sideways. How’s that for clarity? Forecasters speaking at yesterday’s UBS global media and communications conference in NYC predicted that 2010 would end with an increase ranging from 5 to 7 percent in worldwide ad spending over last year. For example, ad revenue for Time Warner's publishing unit was up 5 percent through September after declines of 10 percent and 22 percent in 2008 and 2009, respectively. The total number of ad pages industry-wide declined 1.6 percent through September after declines of 11.7 percent in 2008 and 25.6 percent in 2009, according to the Publishers Information Bureau.

Time Warner announced Monday a reorganization of its sales and marketing units to make it easier for marketers to buy across media properties and platforms. Industry wide U.S. media companies and ad companies have been benefiting from an uptick in spending on TV and Internet ads. Spending on TV ads in the U.S. is expected to climb 7.7 percent to $56.5 billion in 2010, while outlays on Internet ads are expected to grow 13.8 percent to $23.1 billion, according to Zenith Optimedia.

Spending on digital ads remains one of the bright spots in the business, ad executives say. GroupM said it expects global ad spending on Internet ads to overtake spending on newspaper ads at some point in 2012.

As for 2011, most forecasters at yesterday’s UBS media conference expected muted growth in 2011—something in the 4 to 5 percent range as there will not be a plethora of biannual or quadrennial sports/political events to give the ad economy a boost.

As Danielle Sacks noted in Fast Company recently, the explosion of search, geotargeting, the iPad, mobile apps and other platforms give marketers an unprecedented number of tools to work with to pinpoint messaging to target customers. But all those options—which we feel are still in the “experimental phase” for many media decision makers—mean more fragmented media budgets and fragmented consumer attention. Ironically, there have never been more ways to reach consumers, but it’s never been harder to connect with them.

Whether you’re a media owner, B2B marketer or analyst, here’s our take for 2011. The opportunities and dollars are out there—and so are your customers--but we’re in a very opportunistic short-term buying cycle. Customers are armed with more ammunition than ever before. They’re going to be extremely choosy before committing to “sweaty palms” purchasing decisions. As a result, we expect media buyers will be constantly tweaking and revising their budgets.

The days of the 12-month or 24-month “schedule” are fading fast in the rearview mirror. You can still get that business over the same time horizon, but you’re going to have to keep winning that business every couple of months.

If you’re in B2B then we advise you to follow the 4 Bs: Be fast. Be smart. Be agile. Be adaptable.

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