Advertising analyst Magna
has updated its forecast for 2010, and the news is more positive than
one might expect. After initially projecting a 1.3 percent decline in
ad revenues this year, Magna now says that revenues will be essentially
flat, with only a 0.1 percent decline from last year to $161 billion.
For Q1, Magna forecasts that U.S. media suppliers will generate 3
percent less ad revenue on a normalized basis, falling to $36.8 billion
from $38 billion in Q1 2009, according to RBR.com. However,
these figures reflect a moderate pace of decline and Q1 will represent
the last quarter of losses during this recession.
The company said that its outlook
is based on improving expectations for industrial production as well as
consumer spending. Those two economic indicators show the highest
correlation with advertising trends, and as expectations for those two
areas have improved, Q2 of this year should mark the turning point in
advertising recovery.
As for local radio specifically, Magna
projects $12.8 billion in ad revenues in 2010, down 2.5 percent from
$13.1 billion in 2009. That follows a 20.9 percent ad decline last
year. Magna is also predicting a 10 percent year-over-year drop for
local radio in 2011, going down to $12.6 billion. For network and
satellite radio, the company expects revenues of $1.1 billion in 2010,
up 2 percent year-over-year, and another gain of 3 percent in 2011 to
$1.2 billion.
Online ad revenue is expected to increase by 9
percent in 2010 to $24.9 billion. Last year, online ad revenue is
estimated to have fallen 3 percent to $22.8 billion. For local digital,
Magna projects growth of 2.7 percent to $3.5 billion, and a further
gain of 7.3 percent in 2011.
