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ZenithOptimedia Sees TV Spending Rising 2.9% in 2013

Media agency ZenithOptimedia in a new forecast says that with
the economy growing slowly, traditional media, including television, is having
trouble keeping up with its digital competitors.

ZenithOptimedia expects total TV advertising expenditures in
the U.S. to rise 2.9% to $64.3 billion in 2013 from 2012. Bigger gains are
expected in 2014 when spending is forecast to increase 3.8% to $66.8 billion,
but growth slows again in 2015 to 2.5%.

"We continue to see TV dollars moving from network to cable,
and this trend will likely continue as cable networks continue to add quality
programming to their lineups," the agency said in its report.

Spending on the broadcast networks is expected to be down 2%
this year to $17.2 billion. With the Olympics and elections in 2014, spending will
be flat, but will drop 4% in 2015.

"Networks are focused on recapturing audience across screens
and this is leading them to grow their digital and mobile business. Due to
this, our 2013 estimate has remained unchanged," ZenithOptimedia said.

The agency says a handful of product categories account for
about 25% of all network TV spending. The categories include wireless telecom
providers, motion pictures, quick service restaurants, autos and credit cards.
Wireless telecom companies alone account for 6.3% of all network ad spending,
the agency says.

ZenithOptimedia expects spending on cable TV to grow by 7%
in 2013, 2014 and 2015, reaching $24.2 billion in 2014.

Cable now draws a larger percentage of ad dollars than
network TV, accounting for 12.7% of total advertising spending and 32.8% of
total TV spending.

As with broadcast, a few key categories dominate the cable
industry, the agency says. The top five categories in terms of advertising
spend on cable are motion pictures, direct response, quick serve restaurants,
automobile insurance and wireless telecom providers.

For syndication, ZenithOptimedia is forecasting growth of 3.5%
to $2.8 billion this year, with gains of 2% following in 2014 and 2015. New
shows in syndication, led by off-network distribution of Modern Family, will contribute to the growth, the agency says.

Spot TV is expected to rise 3% to $23.2 billion this year,
and rise another 4% in 2014 and 3% in 2015.

For all media, ZenithOptimedia says that "given the current
economic conditions and expected ad market, we are projecting a 3.5% increase
in ad spending for 2013, consistent with our March forecast. We expect further
increases of 4.5% in 2014 and 4.6% in 2015."

The agency expects that "data and measurement of media and
format types is beginning to play a larger role as it continues to evolve and
be standardized across the industry. Traditional media are struggling to reach
new consumers and as a result are losing revenue."

According to the forecast, the largest increases in spending
for 2013 are all under the Internet category. "We expect increases of 54.0% for
mobile, 35.0% for social media, 29.0% for online video and 14.0% for paid
search," the agency said.