MagnaGlobal estimates that ad revenues (ex. Political & Olympics – P&O) grew 1.6% in Q4 2011. As for FY 2011, US ad revenues (core media, ex. P&O) grew 3.1% to $171.7 billion. This represents a small revision of their growth estimate published in January (2.9%). Including P&O, year-on-year growth was 1.7% (compared to 1.6% estimated in January).
Magna continues to forecast a slowdown in ad revenue growth in 2012, compared to 2011. Excluding P&O, core media owners advertising revenues (TV, internet, radio, newspapers, magazines and out-of-home) will grow 2.2%. This is a small increase compared to their previous forecast published in January (2.0%) and remains less than half the 2011 growth (4.8%).The increase is entirely due to an upward revision in their digital media forecast, following a strong Q4 11 and a strong Q1 12.
The beginning of the 2012 election cycle has confirmed expectations that this year will break records in terms of fundraising and political advertising spend. Magna believes that will generate $2.5 billion of political advertising, boosting revenues for mainly local television stations. Local station ad revenue will therefore grow by 10.4% (compared to 0.8% without P&O). National television will also benefit from incremental adspend generated by political activity and by the Olympic Games broadcasts in 3Q 2012. National TV ad revenues will increase by 2.3% ex. P&O (3.9% incl. P&O), which represents a downward revision from their previous forecast (2.9%). Overall, when including P&O, core media advertising will increase by 4.0% in 2012 (previous forecast 3.7%).
Internet media (including national and local) will grow 12.2% (revised from +10.9%) to reach $35.6 billion and a 20.2% market share. Internet media is still driven by paid search, growing double-digit, as well as mobile advertising (53.1% to $2.4 billion), and online video (24.0% to $2.2 billion). With $1.6 billion in 2011, mobile advertising already represents 5% of online advertising and 1% of total advertising in the US.
Among other media categories, outdoor media revenues will grow by 4.0%. Other categories will continue to suffer from the combined competition with cable television and internet media: newspaper advertising will decline by -6.0% (-7.2% for national newspapers) and magazine advertising by -3.8%. Radio ad revenues will decline by -0.8%.
Traditional, offline direct marketing will continue to decline in 2012, losing share to online and mobile alternatives. Directories revenues will decrease by -23.2% and direct mail by -2.4%.
