MAGNAGLOBAL updates forecast: US advertising to rise 3.1% in 2011
MAGNAGLOBAL has updated its US media ad revenue forecast, which is now expected to see a rise of 3.1% in 2011.
The US advertising economy increased 3.2% in 2010 on a normalised basis, with fourth quarter growth of 4.5% – representing the best performance of the year. However, MAGNAGLOBAL says it sees “continued weakness in several key economic indicators”.
“Last week, the International Monetary Fund reduced its estimate for US GDP growth in 2011 to 2.8%, noting that risks to the outlook remain to the downside. As a result, we maintain that the momentum from the rebound will moderate in the second half of this year and have left our forecasts mostly unchanged,” the report said.
MAGNAGLOBAL expects cable networks to be the winners of 2011, outperforming broadcast networks.
“National cable networks were one of the main beneficiaries of the advertising recovery in 2010, growing 12.4% and outpacing nearly every local category, including local online media. Increasingly, large advertisers with reach and frequency goals are turning to network cable as an alternative national mass medium to broadcast TV, attracted by lower rates and broader options. We see a similar trend in 2011, in which large, national advertisers continue to shift dollars to awareness-driven mass media including network cable, which should grow 10.8% and outpace network broadcast TV, which we see growing 2.4%.
“Like network cable, national digital advertising has benefited from a healthier national advertiser base as well as wider adoption. Growth accelerated dramatically towards the end of 2010 and we forecast that the segment grow 18.7% this year, driven not only by very strong growth in display, but also by online video and mobile. Paid search is a strong leader of an otherwise struggling direct media segment, which is mainly relied upon by small and medium-sized businesses. We see direct media (which incorporates internet Yellow Pages, paid search, lead generation, directories, and direct mail) growing only 0.8% in 2011 and under-performing mass media for a second consecutive year.
“Over time, we expect the long-term trend to resume: direct media advertising growth will outpace that of mass media as small and medium-sized businesses more broadly participate in economic growth and again lead media supplier advertising revenue growth.”