MAGNA forecasts a 1.3% US ad revenue decline in 2010
Advertising revenues are expected to decline by just 1.3% in 2010, according to MAGNA’s revised US Media Advertising Forecast.
The new report found that expectations about future economic conditions have improved “markedly during the past two quarters”, and as such, MAGNA has changed its previous 2010 ad decline forecast of 2.1% to 1.3%. Suppliers are now predicted to generate total ad revenues of around $159 billion next year.
However, looking at this year, MAGNA forecasts a 9% drop in US advertising revenue for Q4 2009 compared with the same period last year – falling from $47.5 billion in Q4 2008 to $43.2 billion in Q4 2009.
The 2009 figures reflect a moderating pace of decline compared to the first part of this year though, which is estimated to have declined by 18% in both Q1 and Q2 and by 13% in Q3, according to the report.
MAGNA said the first half of 2009 marked the bottom of the ad-supported media economy’s decline, with Personal Consumption Expenditures (PCE) falling for three consecutive quarters between October 2008 and June 2009 for the first time since records were published in 1947 and Industrial Production (IP) dropping at a faster pace than at any time since 1975 (both of which have the highest correlation with advertising).
“In this economic environment, turmoil was widespread among media suppliers,” the report said. However, there were pockets of growth in the first half of 2009 in terms of paid search and online video, which are also expected to be the fastest growing major media categories for the rest of the year.
In terms of a longer-term forecast, MAGNA expects ad revenue to rise by a compounded annual growth rate (CAGR) of 1.2% between 2009 and 2014.
| 2008A | 2009E | 2010E | 2009-2014 CAGR | |
|---|---|---|---|---|
| DIRECT | ||||
| Direct Online(a) | 13,526.70 | 13,863.30 | 15,442.80 | 10.6% |
| – Annual Growth / Decline | 17.5% | 2.5% | 11.4% | |
| Directories(b) | 12,182.20 | 10,711.80 | 10,174.50 | -6.7% |
| – Annual Growth / Decline | -9.5% | -12.1% | -5.0% | |
| Direct Mail | 21,613.50 | 19,176.10 | 19,574.80 | 2.3% |
| – Annual Growth / Decline | -4.7% | -11.3% | 2.1% | |
| DIRECT TOTAL | 47,322.40 | 43,751.10 | 45,192.10 | 3.5% |
| – Annual Growth / Decline | -0.7% | -7.5% | 3.3% | |
| NATIONAL | ||||
| National Newspapers(b) | 1,180.30 | 911.8 | 876 | -1.8% |
| – Annual Growth / Decline | -14.4% | -22.7% | -3.9% | |
| Network and Satellite Radio | 1,219.90 | 1,090.90 | 1,081.60 | 1.6% |
| – Annual Growth / Decline | -0.5% | -10.6% | -0.9% | |
| National Digital/Online© | 6,186.70 | 5,577.50 | 5,636.70 | 5.3% |
| – Annual Growth / Decline | 3.2% | -9.8% | 1.1% | |
| Magazines(b) | 19,191.80 | 15,511.00 | 14,553.00 | -2.8% |
| – Annual Growth / Decline | -10.7% | -19.2% | -6.2% | |
| National Television(b)(d) | 34,497.40 | 32,313.30 | 32,720.80 | 2.8% |
| – Annual Growth / Decline | -0.1% | -6.3% | 1.3% | |
| NATIONAL TOTAL | 62,276.20 | 55,404.60 | 54,868.10 | 1.5% |
| – Annual Growth / Decline | -3.7% | -11.0% | -1.0% | |
| LOCAL | ||||
| Local Digital/Online(c) | 3,828.70 | 3,403.00 | 3,532.20 | 6.8% |
| – Annual Growth / Decline | 1.7% | -11.1% | 3.8% | |
| Outdoor | 6,991.40 | 6,074.50 | 6,078.80 | 3.7% |
| – Annual Growth / Decline | -4.0% | -13.1% | 0.1% | |
| Local Radio(b) | 16,536.00 | 12,971.10 | 12,365.90 | -0.8% |
| – Annual Growth / Decline | -10.5% | -21.6% | -4.7% | |
| Local TV(b)(e) | 18,154.60 | 14,538.60 | 14,414.20 | 1.5% |
| – Annual Growth / Decline | -14.9% | -19.9% | -0.9% | |
| Local Newspapers(b) | 33,559.20 | 24,893.90 | 22,553.30 | -5.1% |
| – Annual Growth / Decline | -17.8% | -25.8% | -9.4% | |
| LOCAL TOTAL | 79,069.90 | 61,881.10 | 58,944.40 | -0.9% |
| – Annual Growth / Decline | -13.8% | -21.7% | -4.7% | |
| TOTAL | ||||
| TOTAL EXCLUDING POLITICAL AND OLYMPICS | 188,668.50 | 161,036.90 | 159,004.60 | 1.2% |
| – Annual Growth / Decline | -7.5% | -14.6% | -1.3% | |
| Political(f) | 2,385.30 | 1,086.10 | 2,917.10 | |
| Olympics(g) | 600 | 0 | 487.5 | |
| TOTAL SUPPLIER AD REVENUES | 191,653.80 | 162,123.00 | 162,409.20 | 1.5% |
| – Annual Growth / Decline | -6.4% | -15.4% | 0.2% |