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JP Morgan Releases Upbeat Ad Insights

Good news on the advertising outlook from J.P. Morgan, which this morning revealed some upbeat results from a proprietary survey about ad spending for the second half of the year.

The company projects ad spending in the latter half of 2009 to be more than 5 percent higher from the prior six months, with cable and Internet ads gaining market share from other platforms. Results in the second half are expected to be roughly flat with the year-ago period when the financial crisis pulled the bottom out of the ad market. These projections are based on J.P. Morgan's survey of 20 media buyers who manage $1.6 billion in annual advertising spend.

With overall advertising spending down by double digits this year, media giants like CBS, News Corp and even Disney are carefully watching for signs that ad spending is on track for a sustained rebound. It's been a rough year, particularly for sectors like newspapers and magazines, many suffering ad declines over 20 percent, prompting closures like Conde Nast's shuttering of four of its titles early this week. The fact that certain financial firms simply disappeared and US automakers dramatically reduced ad spending during their reorganization didn't help any. Meanwhile network TV is losing viewers and ad dollars to more targeted cable programming, and of course the Internet.

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J.P. Morgan's survey supports these continuing trends - Ad spending on broadcast and cable TV still dominates all other forms of advertising, at over half of marketers' budgets. But when it comes to growth, cable and the web are the fast-growers, with Internet ads expected to account for 29 percent of budgets in 2010, while cable is expected to attract a couple percentage points for 26.2 percent of overall budgets in 2010. That's not to say cable and web ads will eventually eclipse the rest of the business - hardly. The different media serve different purposes, and broadcast network TV is still seen as a premium-branding tool.

One interesting nugget buried in the report is the fact that some of these media buyers see *cable* television as an effective means of direct marketing. For next-generation direct marketing, we usually think of how Internet ads track consumer interaction and users responses, but now cable is proving surprisingly useful when it comes targeting - after all marketers can target by zip code and to specific programming. The cable giants have been talking about the benefits of "interactive TV," in which consumers could interact with the ads, saying yes to more food ads and recipes, and no to auto ads. As this kind of interactivity and even narrower targeting is implemented will surely snag more ad dollars from traditional formats like newspapers, radio, and broadcast TV.

As Alcoa kicks off third quarter earnings season, we'll be watching carefully to see what the media giants report, and what kind of guidance they can give about ad trends as we push into the fourth quarter, when marketers typically spend big to drive holiday sales.

Questions? Comments? MediaMoney@cnbc.com