Media Agencies Cast Bullish Ad Forecasts

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Ad spending growth is expected to accelerate as the economy gradually recovers in the U.S. and internationally, according to forecasts from major media agencies.

GroupM sees U.S. ad spending increasing 3.7% to $147.7 billion in 2011, following a 1.2% uptick in 2010. Spending declined 7.1% in 2009. Worldwide, the agency sees spending growing 5.8% to exceed $500 billion for the first time in 2011.

"We've seen a significant rebound in advertising spending in the U.S over the last six months," said Rino Scanzoni, chief investment officer of GroupM "Television and online media have been the primary beneficiaries of the rebound in spending. In television, the growth is driven by local TV as political advertising-coupled with the resurgence in growth from the retail and auto categories-has risen from the historically depressed levels of 2009."

MagnaGlobal sees U.S. television revenues rising 1.8% in 2011 to $57.2 billion, with pay TV up 8.8% and broadcast, without election or Olympic spending, contracting 3.1%. For the years 2011 to 2016, MagnaGlobal sees TV rising at a compounded annual growth rate of 6.5%, with cable gaining 9.3% and broadcast increasing 4.1%.

MagnaGlobal sees total U.S. spending rising 2.4% to $146.5 billion in 2011, following a 6.2% gain in 2010. From 2011 to 2016, the agency forecasts 4.6% growth.

ZenithOptimedia is forecasting that expenditures on major media in the U.S. will gain 2.4% in 2011, and advance 2.8% in 2012 and 3.3% in 2013. In 2010, U.S. ad spending is finishing up 2.2%, according to the agency.

 ZenithOptimedia sees worldwide ad spending growing between 4.6% and 5.2% for the next three years, and recovering to the record level of 2008 in 2012.

Worldwide, MagnaGlobal forecasts that media revenues will grow 5.4% to $412 billion. In its forecast just six months ago, MagnaGlobal foresaw a 4.2% increase. The gains follow expected growth of 6.9% in 2010.

Executives from the agencies will be discussing their forecasts Monday morning at the UBS' 38th annual global media and communications conference in New York.
Read more at B&C.

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