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Magna Raises 2010 Ad Forecasts, Mags to Continue Decline
Tuesday, January 19, 2010
Steve Smith

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The outlook for ad spending in 2010 is just a bit brighter today than it seemed late last year, says media forecaster Magna. In a modest revision of an earlier prediction for the year, the media analysis firm said this morning that ad spending in the U.S. (excluding political and Olympics-related advertising) will decline only .1% for the year from 2009, compared to an earlier estimate of -1.3%. The first quarter of this year will represent a bottoming of the market, with a decline of 3% from same period last year. The fall-off is moderating, says Magna analyst Brian Wieser, and this should be the last quarter of decline for the ad economy in this recession. Magna is also revising its estimates of future growth by foreseeing a compound annual growth rate (CAGR) for ad revenues of 2.3% between 2010 and 2015. Rebounds in industrial production and personal consumption expenditures, key measures in Magna’s forecasts, account for the revisions.

Despite the slightly rosier outlook for media overall, the print side continues to be challenged. Magazines overall were estimated to have declined 19.6% in 2009, but in 2010 the industry still will see -7.3% negative growth (representing $14.3 billion in total spend) and again -3.2% ($13.8 billion) in 2011. CAGR for magazines will be -2.7% from 2010-2015.

Where is the money going? The bright spots overall will be on the digital side. Direct marketing online (search, lead-gen, directories) will enjoy 10.8% CAGR for the period. National digital (video, display, rich media, email) CAGR will be 7.8%. And local digital spending will have a 7.6% CAGR. National TV, too, will outperform the overall ad growth pace, with a 4.1% CAGR.

The spending trends obviously favor accountability. The direct marketing categories such as direct mail and search are leading the way, with a CAGR of 4.1% for the period. National categories of brand advertising across the print, electronic and digital platforms lag in growth with a 2.8% CAGR. For online and offline media that rely on branded advertising, there is an obvious need to build into their product some higher level of accountability and measurements of success.

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com

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