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Magna Forecasts Rise in National TV Ad Spending this Year - Broadcasting & Cable

Magna Forecasts Rise in National TV Ad Spending this Year

Political dollars for 2010 estimated at $2.7 billion
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National TV ad spending will be up 6.2% to more than $35
billion in 2010, Interpublic unit Magna reported Tuesday (Jan. 19).

Marketers are expected to begin restoring their budgets as
industrial product and personal consumption expenditure indicators begin to
mark improvement. Magna had another positive surprise in its report. The
research unit suggests national marketers ad spend dipped by only 3.6% in 2009.
Magna includes Spanish-language TV, national cable and syndication in its
definition of national television. The forecast also excludes Olympic revenue
which is put at $487.5 million, down slightly from the $650 million generated
at the 2006 Winter Olympics. The news is likely to buoy TV sales executives
currently in the midst of calendar year deals and upfront strategizing. Many
expect stronger demand for upfront inventory given the double digit scatter
pricing in the current TV ad market.

Separately, local TV is forecast to decline by 1% to $14.3
billion in 2010. The picture for local TV is however brighter than it might
initially appear since the report which strips out local political ad revenue.
That figure is expected to hit $2.7 billion this year. Local TV is defined as
both local broadcast and local cable. The number also excludes any
internet-based ad income.  Digital ad
revenue meanwhile is also expected to be up 4% this year to $5.7 billion, after
falling 10% last year. 

Over the longer term, national TV is expected to recover
much better than local, under Magna's definitions. Compound annual growth
between 2010 and 2015 will be 4.1% in national TV and only 2.3% in local TV.
The biggest gainer among media sectors over the period is direct online
advertising which includes paid search, lead generation and internet yellow
pages. That category is expected to see 10.8% growth over the next five year
stretch.

Separately, Magna's forecast suggests the first quarter of
2010 will be the final quarter of decline for the US ad economy. Ad revenue for all
media will be flat to only 0.1% below 2009 levels. That prediction also
excludes political and Olympic ad dollars. Magna had previously anticipated a
decline of 1.3% in 2010.

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