Magna Global Now Sees A Dip In U.S. Ad Spending
Radio Among Media Most Affected
June 17, 2011 at 4:01 AM (PT)
In JANUARY (NET NEWS 1/19), MAGNA GLOBAL reforecast their view of the U.S. ad economy, seeing growth at a 3.1% rate this year, about on par with 2010. The forecast predicts that TV and older forms of digital media will continue to soar.
But that view has changed. Calling it the "first signs of weakness," MAGNA GLOBAL has "issued a downgrade to its outlook for U.S. ad spending in 2011, revising its downward two-tenths of a point to 2.9%, from 3.1% in its previous forecast," reports MEDIAPOST.
"In light of recent economic reports, we are revising our forecast slightly downward," wrote Magna, noting that the estimates, which bring its 2011 U.S. ad spending projection to $173.1 billion, exclude the impact of political and Olympic advertising. "While we see the disruption from the earthquake in Japan and high gas prices as temporary, the economy still suffers from a depressed housing market, sluggish employment conditions, and fiscal retrenchment at all levels of government. Our previous forecasts had already conservatively assumed a slowdown in the second half of 2011."
Even with this downward correction, MAGNA sees positive news with online ad spending, noting that the medium's growth "exceeded our expectations in the first quarter as the share attributed to national media (primarily reflecting digital display and online Video) was significantly higher than recent trends would have predicted. Though some premium display publishers may have seen a slowdown stemming from the broader economy, National Online advertising overall benefited significantly from strong momentum in online video and social media as large national advertisers begin to invest more in building brand awareness online."
There's less than positive news for radio, as MAGNA writes "In total, we expect national TV to grow 7.9% in 2011, up from our previous estimate of 6.5%. Despite upward revisions to national mass Media, signs of a slowdown are concentrated in local mass media, driven by weakness in newspapers, radio and outdoor advertising. Direct media (which incorporates Internet Yellow Pages, paid search, lead generation, directories, and direct mail) has been particularly impacted by sharper declines in directories and a slowdown in direct mail."