The Coming "Advertising Depression"

Ad market forecasters have been ratcheting back their outlooks for months now, but media economist Jack Myers just upped the ante with his prediction of an "advertising depression." Myers, a longtime industry consultant who runs JackMyers.com, is now forecasting an unprecedented three straight years of declines in advertising and marketing spending in the U.S. starting this year. To put that in perspective, the industry hasn't suffered even a two-year spending decline in advertising since the 1930s. All the money expected to leave advertising has weighed on the media sector, especially the ad agencies. "It's not just economic," Myers said. "It's secular and systemic. It's like moving from an agrarian economy to an industrial economy. Anyone connected with the advertising business is challenged right now." After growing at a blistering pace over the past several decades with just a few isolated recession years along the way, the marketing and advertising engine that has propelled the US economy is sputtering. If Myers' forecast is accurate, the industry, which has long been viewed as being riddled with inefficiencies and extravagance, is likely headed for a massive shakeout.