The US advertising market will turn in another tepid performance next year in spite of the rapid growth of online advertising and an expected bonanza from the Olympics and the US elections, according to a forecast presented on Monday by Universal McCann.

The agency, a division of Interpublic Group, believes that US advertising spending will increase by just 3.7 per cent in 2008 to $294.4bn, trailing the growth of the broader economy and rates in the rest of the world.

That prediction, delivered by Robert Coen, director of forecasting at Universal, comes on the heels of a weak 2007, in which US advertising is expected to end the year with a 0.7 per cent gain over 2006 in spite of the economy being on track to expand 4.7 per cent.

US media companies are already concerned about the threats that new digital technologies pose to their traditional advertising-supported business models. They are also feeling jittery about rising oil prices, the housing crisis and the possibility of an economic slowdown.

“We don’t see an awful lot of great expectations,” Mr Coen said, noting that US advertising spending had steadily declined as a percentage of gross domestic product since 2000. He cited the rise of alternative forms of marketing, and, more recently, worries in corporate America about a sluggish 2008. “One of the main reasons the advertising market is so slow is stress by marketers to keep their profits up,” he said.

Steve King, chief executive of ZenithOptimedia, a media buyer owned by Publicis, predicted that the US market would grow 4.1 per cent in 2008. Both men agreed that growth would be faster outside the US, with Mr King forecasting a 6.7 per cent rise in overseas spending next year to $485.57bn, led by Russia and China.

Next year’s figures will be flattered by three events – the Olympics, the US elections and the European soccer championships. Altogether, Mr King predicted that they would add $6bn in spending.

US newspapers, which are losing much of their classified advertising to the internet, will remain under pressure. After seeing their advertising contract 3 per cent this year they will be flat next year, Mr King said.

Internet advertising, on the other hand, will continue its rapid growth, increasing 24 per cent next year to $45bn, and overtaking the magazine industry by 2010.

Among advertisers, the automakers will remain one of the most closely-watched industry groups. They have cut back advertising spending by 8 per cent compared with 2006, according to Mr Coen. That reduction has had knock-on effects, he said, pressuring prices, and encouraging other advertisers to drive harder bargains.

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