New York—U.S. advertising spending is predicted to grow a mere 3.1% to $290.3 billion this year, Robert J. Coen, senior VP-director of forecasting at Universal McCann, said in a media briefing Tuesday.

“The outlook for advertising this year is not very good,” Coen said in presenting Universal McCann’s Advertising and Media Outlook Mid-Year Update.

Coen said large companies have been cutting expenses wherever they can as they focus on productivity and profit growth. Online advertising and search marketing have “violently” impacted established media as the appeal for marketing tactics closely tied to transactions grows.

In terms of national advertising by medium, Internet and direct mail were the biggest gainers in the first quarter, growing 16.7% and 4.5%, respectively, ovwer the same period last year. Spending on TV, spot TV, syndicated TV, spot radio and newspapers decreased in the first quarter.

International ad spending is growing faster than U.S. ad spending this year, according to Universal McCann.

In addition, Coen made his first projections for 2008. In the U.S., ad spending is expected to increase 5.0% next year to $305.0 billion, while overseas ad spending is projected to increase 5.8% to $360.0 billion.

—Carol Krol