Magna Raises Ad Revenue Forecasts - Broadcasting & Cable

Magna Raises Ad Revenue Forecasts

Television up 8.3% thanks to Olympics, elections, World Cup
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Media agency Magna Global forcasts ad spending to grow faster than previously expected.

In its new forecast, Magna says that economic recovery, plus a series of special events, such as elections, Olympics, the World Cup and the Affordable Care Act, will push media spending growth to 6% in 2014, up from its original forecast of 5.5%.

In 2013, ad spending grew 2.4%, according to Magna.

Digital will be the fastest-growing media segment, up 14.4%, but TV is in position to benefit most for the special events, growing 8.3%, compared to a 0.6% decline in 2013, Magna said.

The agency says there was relatively low demand for TV during the first quarter of 2014, which lead to soft prices in the scatter market. The weakness was caused by a temporary economic slowdown and by the cold weather that affected retail, auto and restaurants.

“We believe that demand will gradually pick up across the year and that political spending alone will provide $3 [billion] of incremental revenues to local television in Q3 and Q4,” the Magna forecast said.

Spanish television will also benefit from the non-recurring soccer FIFA World Cup.  Both Univision and ESPN will be broadcasting all 64 games live, for the first time in the U.S.

Local broadcast is forecast to grow 16%. It is expected to get the bulk of political spending in the mid-term elections, plus incremental spending from insurance companies, healthcare institutions and government, in connection with the introduction of the Affordable Care Act.

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