U.S. Ad Spending To Decline 3.2% In 2008, 4.5% In 2009: Magna
Agency Forecast Calls For Cable To Buck Trend With Single-Digit Gains In Both Years
By Mike Reynolds -- Multichannel News, 12/8/2008 5:49:00 PM
Magna estimated that advertisiing expenditures would fall both this year and next, but cable would buck those trends with small gains in both periods.
A unit of IPG, Magna forecast that U.S. ad spending will decrease 3.2% to $270.8 million in 2008, before dropping even further in 2009: declining at a 4.5% rate to $258.7 million.
Robert Coen, Magna senior vice president and director of forecasting, said that political ad spending, as well as outlays against NBC’s coverage of the Beijing Olympics, blunted the slowdown in spending on such traditional media as TV.
Coen, who presented Maga’s report at the UBS Global Media and Communications conference in New York on Monday, predicted that if there is a turnaround in the ad market, it won’t come until the second half of next year – and even that amelioration would be relative.
“If some improvement in ad demand does make an appearance it will probably be later in 2009 rather than early in the year,” he wrote. “The improvement may only be a comparative one since the ad spending trends have been so poor in many months during the second half of this year.
"Until consumers start spending more and marketers become confident that sales of their products are recovering," he continued, "they will not loosen the tight controls on their ad budgets and will also hold down the size of their workforce."
As for cable, Magna projects the sector will record a 4% gain in 2008 to $21.44 billion.
ABC, NBC, Fox and CBS will score a 3.5% gain to $17.3 billion this year, according to Magna, which pegs syndicated TV’s advance at 7% to $3.56 billion, while spot is expected to fall 3% to $9.8 billion.
Radio (-10% to $3.8 billion), magazines (down 6% to $12.9 billion) and newspapers (off 10% to $5.95 billion) are all projected to decline in 2008, according to Magna.
Among those sectors, cable -- 1% to $21.7 billion -- and syndicated TV -- 2% to $3.63 billion -- are the only ones forecast by Magna to grow in 2009.
Indeed, the broadcast networks are projcted to recede 7.5% to $15.9 billion, while spot TV could slide 11% to $8.7 billion.
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