Bloomberg News

U.S. Ad Sales to Grow at Faster Rate, McCann Says

December 05, 2005

Advertising sales growth will accelerate next year, sparked by a jump in online spending, ad agency Universal McCann said today.

U.S. advertising sales will increase 5.8 percent to $292 billion in 2006, compared with a 4.6 percent rise this year, Robert Coen, director of forecasting at Universal McCann, said at a media conference today in New York.

Online spots are the fastest-growing segment of advertising, fueling sales at Google Inc. (GOOG:US), the top search engine, and No. 1 Web site operator Yahoo! Inc. (YHOO:US) Internet spending will surge 24 percent to $22.4 billion worldwide next year, as publishing ads rise 3.8 percent, said Steve King, chief executive officer of London-based ZenithOptimedia, who was on a panel with Coen.

``The share lost by newspapers and magazines matches that gained by the Internet,'' King said.

Television commercials on the ABC, CBS, NBC and Fox networks will rise 6.5 percent to $18 billion next year, Coen said.

NBC will receive more advertising during its February broadcast of the winter Olympics, while television stations will see an increase in political advertising, he said. Universal McCann is a unit of New York-based Interpublic Group of Cos.

The two biggest U.S. newspaper companies, McLean, Virginia- based Gannett Co. and Tribune Co. in Chicago, may reduce their forecasts for 2006 ad growth this week, according to a JPMorgan Chase & Co. report.

Gannett shares fell $1.01 to $59.88 at 4:16 p.m. in New York Stock Exchange composite trading. Tribune fell 53 cents to $30.86. Interpublic fell 6 cents to $9.28.

Mountain View, California-based Google dropped $11.85 to $405.85 in Nasdaq Stock Market composite trading. Sunnyvale, California-based Yahoo fell 74 cents to $40.47.

To contact the reporter on this story: Aimee Picchi in New York at apicchi@bloomberg.net.

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net.


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