While there are signs of a rebound, advertising revenues remain fragile in nature and spending is unlikely to return to former levels, says the annual “Global Entertainment and Media Outlook” from PricewaterhouseCoopers (PwC). The five year outlook says that by 2014, the US advertising spend is expected to still be 9% below its level in 2007.
Overall U.S. advertising is expected to increase at a 2.6% consolidated annual growth rate (CAGR) from $159 billion in 2009 to $180 billion in 2014. One key point: In the US, Internet advertising is expected to surpass newspaper advertising spend in 2010.
Advertising spending for Internet, television, radio, out-of-home, and video games are expected to be larger in 2014 than in 2009, while consumer magazines, newspapers, directories and trade magazines are expected to be smaller. These projections reflect the market fragmentation and consumer behavioral changes. The advertising industry is responding to consumers’ shifting attention and migrating towards total marketing or total brand communication. Brands are changing their focus from advertising on a medium, to marketing through, and with, content, according to the analysis by PwC.
In the US, Internet access and Internet advertising is expected to continue to outperform the other E&M segments, with 8.8% and 7.7% CAGR, respectively. Video games (6.4% CAGR), TV subscriptions (6.5% CAGR) and TV advertising (5.3% CAGR) are set to grow more than 5% compounded annually.
Radio (4.6% CAGR), filmed entertainment (3.6% CAGR), out-of-home advertising (3.2% CAGR), consumer and educational book publishing (2.5% CAGR), and business-to-business publishing (0.9% CAGR) are expected to generate modest growth.
Spending on recorded music (-2.4 CAGR), newspaper publishing (-2.8 CAGR), and consumer magazine publishing (-0.5 CAGR) are expected to each be lower in 2014 than in 2009.