BREAKING NEWS & VIEWS
Worst of Ad Recession Over?
Tuesday, July 14, 2009
Media research firm MAGNA says it sees a silver lining in the 14% ad revenue drop it projects for this year across all media. The good news is that the first six months of 2009 may have been the worst of it. The company estimates that the media lost 18% of its ad revenue in 1H compared to the same period in 2008, but that the rest of the year should see declines continuing at moderating levels. Greater stability in the financial markets and increased consumer confidence lead MAGNA to expect a bottom.
But you know there must be another shoe to drop. MAGNA expects that the recovery will be long and slow, with another 2% decline in 2010 and a compound annual growth rate of only 1% between this year and 2014.
For magazines, MAGNA seems to think the worst of the drop-off occurred earlier in the year, since full-year revenue declines should be 18.3%. Nevertheless, the projections suggest a genuine secular shift at work for print, with CAGR of -3.3% from 2009 to 2013. Brian Wieser, chief forecaster for MAGNA and author of the report, tells minonline that analysts often blithely declare that print eyeballs simply are moving online. "The notion that print is dead is a widely held perception and is incorrect. Although circulation is flat for ABC [audited] titles [despite population growth], it's not entirely accurate to imply, as many do, that all eyeballs move online. Of course in some sectors they clearly have, and in others both have grown concurrently."
For digital media, the MAGNA outlook is better, if not rosy. Wieser pegs direct online media (direct response, search, etc.) ad growth for 2009 at $13.9 billion, up 2.9% for the year. He expects the CAGR for the Internet direct media economy to reach 10.2% between 2009 and 2014. After a relatively flat 2009, the growth curve should return to levels slightly shallower than the enormous run-up between 2005 and 2008. Search and lead gen are still king.
For the wider national display ad universe, 2009 will see an 11.1% decline and a CAGR of only 4.7% between 2009 and 2014. On the local level, things are a bit stronger for display, with a 6.4% CAGR for the period.
Wieser’s projections seem to suggest that display advertising will not successfully make its case with brand marketers. Publishers have been trying to stem the flow of ad dollars to direct response media by insisting that display branding campaigns actually help accelerate direct response. Banners boost search, the argument goes. Nevertheless, as far as MAGNA is concerned display will continue to struggle in a medium that seems to define itself as a direct response vehicle first and foremost.
If you have breaking news to share please contact min's editors.
Up and Coming
|Copyright © 2014 Access Intelligence, LLC. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Access Intelligence, LLC is prohibited. For more details please see Terms and Conditions.|