Magna: Ad Growth Flat in 2010

In light of heightened expectations of economic recovery, Interpublic’s Magna on Tuesday issued an updated full-year forecast, modestly upgrading its outlook for the U.S. advertising market.Brian Wieser, senior vp, director of global forecasting, Magna said he now anticipates normalized advertising revenues (excluding local TV political spend and national TV Olympic revenues) will be “effectively flat this year, only 0.1 percent below 2009 levels.” That reassessment comes on the heels of Magna’s December, 2009, projection of a 1.3 percent decline in stateside ad revenue.Based on the revised outlook, Wieser now expects that U.S. media suppliers will generate $161 billion in ad revenue this year. When political and Winter Olympics dollars are factored in, 2010 ad dollars will add up to $164.3 billion, an increase of 1.4 percent from a year ago. Naturally, political spend will account for the lion’s share of that $3.3 billion bonus, as Wieser sees election spots contributing $2.74 billion to the U.S. ad marketplace, while the Games will add $487.5 million. Magna estimates that incremental revenue generated by this year’s Olympics will be down 25 percent from the 2006 Torino Games, which pumped some $650 million in ad dollars into the media economy.National TV is expected to be particularly resilient in 2010, as Wieser predicts that broadcast and cable nets will haul in some $35.3 billion in ad revenues, up 6.2 percent from last year’s $33.3 billion. Other strong media categories include: Direct online ad spending (includes search and lead generation), which is expected to grow 12.2 percent to $15.6 billion; national online ad spending (includes mobile and Internet video), which could grow as much as 4 percent to $5.77 billion; and direct mail, which Wieser expects will be up 4.1 percent to $19.9 billion.Meanwhile, it will be another tough year for print, as Wieser foresees an 10.7 percent decline for newspapers, with ad sales dollars tallying $21.8 billion, and a 7.3 percent drop for magazines ($14.3 billion). That said, the dailies and glossies will show signs of relative improvement, given their respective plummets of 27.2 percent and 19.6 percent in 2009.In addition to the refurbished outlook for 2010, Wieser also modestly upgraded his longer-term forecasts, telling investors that ad dollars will swell by a compounded annual growth rate of 2.3 percent between 2010 and 2015, up from 2.1 percent from his December forecast. In June 2009, Wieser offered a far more grim long-term outlook, predicting a CAGR of just 1 percent between 2010 and 2015. That forecast was Wieser’s first since he replaced Robert Coen as Magna’s chief forecaster back in March 2009.

Brand Marketing

Magna: Ad Growth Flat in 2010

Anthony Crupi

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Anthony Crupi