US Communications Indus Spending Set to Grow 5.6% in ’12

April 13, 2012

vss-us-communications-indus-growth-rate-2012-april2012.jpgUS communications industry spending is on pace to reach $1.185 trillion this year, representing 5.6% growth following solid 4.2% year-over-year growth in 2011, forecasts Veronis Suhler Stevenson (VSS) in an April 2012 report. VSS predicts that total industry spending will reach $1.419 trillion by 2015, marking a 5.7% compound annual growth rate (CAGR). The targeted media sector is projected to grow the most rapidly this year, at 8.1%, while the traditional marketing (3.8%) and traditional consumer advertising media (2.6%) sectors are predicted to post the slowest growth rates.

Entertainment & Leisure Media to Reach $354B in 2015

vss-us-communications-indus-spending-in-2015-april2012.jpgLooking at 2015 forecasts by sector, VSS predicts the entertainment and leisure media sector to get the greatest amount of spending, reaching $353.9 billion that year. The education and training media and services sector will follow at $293 billion, ahead of the targeted media sector, at $278.4 billion. The business and professional information and services sector will see spending of $247.2 billion, while the traditional consumer advertising media sector will hit $160.4 billion and the traditional marketing sector will reach $86.6 billion.

Pure-Play to Jump 18.1% in ’12

Within the targeted media sector, the pure-play consumer internet and mobile services segment is expected to grow an impressive 18.1% this year as consumers and businesses expand their use of communications platforms. Branded entertainment (7.5%) and outsourced customer content (6.7%) are also predicted to outperform this year’s projected industry growth rate of 5.6%, with B2B media (5.5%) not far behind. This would be another strong showing for the B2B media segment, which finished 2011 up 7.2% to $26.5 billion, according to March results from American Business Media (ABM).

Direct marketing, by contrast, is forecast for relatively slower growth of 2.9%.

PR & W-O-M Segment Also to Grow Rapidly

Data from the “VSS Forecast Mid-Term Update” indicates that within the traditional marketing sector, the public relations and word-of-mouth marketing segment is predicted to post rapid growth this year, at 14.6%. B2B promotions (4%) and consumer promotions (2.1%) are also forecast for growth, although at a comparatively more muted rate.

Broadcast TV Among Top-Growing Segments

Broadcast TV (9.3%) spending is predicted to grow rapidly this year, as is out-of-home media (7.2%) spend. These will easily outpace growth rates of other traditional consumer advertising media segments, including broadcast and satellite radio (2.6%) and consumer magazine publishing (0.8%). In fact, the newspaper publishing and local consumer directories segments are both forecast to decline this year, by 3.8% and 5.6%, respectively.

Subscription TV to Lead Entertainment & Leisure Media Growth

The subscription TV segment is projected to by 7.7% this year, outpacing the overall entertainment and leisure media sector growth of 5.7%. The entertainment media (TV programming, home video, videogames, recorded music, box office) segment is forecast to grow 3.5%, while consumer book publishing is expected to decline by 2.2%.

Other Findings:

  • Spending on business and professional information and services will rise 6.4% this year. The business and professional services segment will grow at a faster rate than the business and professional information segment this year (7.1% vs. 5.6%).
  • The growth rate for the education and training media and services sector is predicted to be 5.3% this year, fueled by an increase in spending on outsourced corporate training.
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