MAGNA has issued a somewhat rosy updated US Media Advertising Revenue Forecast, following on its most recent quarterly update in January. In total, they expect media suppliers to generate $164.5 billion dollars of advertising during the year. On the back of continued improvements in the economy and an increased likelihood of sustained growth in the near-term, MAGNA forecasts that excluding Political and Olympic advertising on TV, on a normalized basis the US ad economy will grow by 1.6% during 2010, ahead of their prior forecast of flat year-to-year growth.
Including Political and Olympic advertising, they expect 3.0% total industry growth for 2010. As expectations for the broader economy have improved over an extended time-frame as well, they are increasing their long-term forecasts as well, and now expect growth to average 3.5% between 2010 and 2015, up from +2.3% previously.
Among the various sectors, television remains the largest ad platform in the US, generating $56.0 billion in total ad revenues in 2010. Online advertising will once again prove to be the fastest growing medium during 2010, with Paid Search alone rising 16.8%. Local media is generally likely to perform better than they had previously forecast as well.
For Q2 2010, MAGNA forecasts US media suppliers will collectively generate 2.0% more ad revenue on a normalized basis than they did when compared to the prior year period, even accounting for the very weak economy experienced in early 2009. Normalized Industry revenues will rise from $40.1 billion in Q2 2009 to $40.9 billion during the Q2 2010.
Television remains the largest ad platform in the US. The $54.8 billion dollar segment will grow by 10.2% during 2010, slightly higher than their prior 8.5% expectation. This growth will mostly erase 2009’s 10.5% loss and return the industry to the size it was during 2005.
Online advertising will once again prove to be the fastest growing medium during 2010. MAGNA expects 12.8% growth in online advertising revenues, led by 16.8% growth in paid search. Much of this growth will be due to the increasing ease with which many advertisers – especially those who are endemic to the Internet as well as small and mid-sized companies –can accomplish their goals through digital media. While mobile platforms such as the iPad will generate much excitement this year, mobile advertising will generally contribute only limited volumes of incremental advertising dollars to the marketplace. However, sustained innovation and rising levels of internet access – which should rise to nearly 100 million households and 80% of the population shortly after 2015 – will support sustained growth of 10.7% for the sector each year through that time. In 2015, online advertising should generate $42.7 billion in total revenues, 21.9% of total industry activity.
Local media is generally likely to perform better than they had previously forecast as well. While MAGNA is not modifying its local TV political forecasts – recent court rulings only modify the means by which fundraising will take place rather than the volumes – local TV has proven robust as the automotive sector returns to the airwaves. Local TV should now grow by 16.2% including an expected $2.7 billion of political advertising. Due in part to similar underlying conditions, radio is now expected to grow by 0.6% and outdoor is expected to rise by 3.5%, all improvements from their prior expectations.
MAGNA’S US Advertising Revenue forecast is accompanied by the release of MAGNA’s updated forecasting model, which includes detailed data for more than 40 categorizations of media on a quarterly basis from 1990 to 2011 and on an annual basis from 1980 to 2015.