Magna: Total Media Market Growth Stalled Until 2011?

A new forecast from Magna, the research and marketplace intelligence arm of Interpublic Group's Mediabrands, predicts that the ad recession will continue for another two years, with total market growth not showing up until the second half of 2011. Magna has completely overhauled the format for the ad projections it typically makes twice a year, focusing more on media-company advertising revenue instead of gross advertiser expenditures. Brian Wieser, who replaced Robert Coen as the company's chief forecaster in March, presented the first of the newly formatted forecasts via a Monday teleconference. Magna predicts a 14.5 percent decline in U.S. ad revenue for 2009 to $161 billion. The shop said that the first half of 2009 will likely turn out to be the worst period of the recession, with an 18 percent drop in ad revenue vs. the same period in 2008. And the next five years will see tepid overall growth, according to the forecast. For the five-year period from to 2009-14, Magna predicts an annual compound growth rate of just 1 percent. Wieser said that TV would remain a dominant medium for the foreseeable future given the objectives of major advertisers seeking to build broad national awareness for their products. Still, TV will take a big hit this year, with ad revenue dropping 14 percent to about $48 billion. Over the next few years, the medium will grow at an annual clip of a little more than 3 percent. National TV will remain healthier than local, with networks and other vendors taking a 6 percent revenue hit this year to $32 billion. Growth over five years is expected to average slightly more than 2 percent. Local TV will plunge 19 percent this year to $15 billion while growth over five years is expected to average 1.3 percent. Online remains relatively healthy, and Magna predicts the entire sector will drop just 2.2 percent this year to $23 billion, rebounding fastering than most of the traditional media over the next five years to grow at an average rate of 8.4 percent. Direct will be the fastest growing online segment, posting a 3 percent gain this year to almost $14 billion with average growth of 10 percent over five years. Magazine ad revenue will drop 18 percent this year, per Magna, to $15.7 billion. Revenue in the segment will continue to fall at an average annual clip of 3.3 percent until 2014. Declines are also expected for radio, newspapers and directories for the foreseeable future. Network and satellite radio will drop a combined 11 percent this year to $1.1 billion, while local radio will plunge 22 percent to $13 billion. Combined, radio will drop 21 percent to $14 billion this year with an average decline of one percent over five years. Newspapers will plummet 25 percent this year to $29 billion, with an average decline of 4 percent until 2014. Directories (including online) will drop 11 percent this year to $12.1 billion with an average decline of 4 percent over five years. Outdoor will drop 13 percent to $6.1 billion, but show growth of 4 percent on average over Magna's five-year forecast period. Direct mail will drop 11 percent to $19.2 billion this year, but show average annual growth of 2 percent over five years.Nielsen Business Media

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Magna: Total Media Market Growth Stalled Until 2011?

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