Media buyer Magna Global has issued a more pessimistic
forecast for TV advertising revenue growth.
Magna says it now expects TV revenues to decline by 2.6% in
the U.S. to $13.1 billion. Its previous forecast called for a 1.4% decline in a
post-Olympic and post-election year. Factoring out the Olympics, TV spending
would be up 2.2%.
The agency says that it made the biggest revision to its
forecast for national broadcast, calling for a 2.1% increase versus its
previous expectation of growth at a 4.8% rate.
"Since the beginning of the broadcast season in September,
the scatter market prices have showed very little 'premium' over the upfront
CPM inflation despite the fact that primetime ratings have been weaker than
expected (-5% for broadcast networks, -2% for cable networks, on adults 18-49,
including sports) and broadcasters had to serve extra spots to meet their
guaranteed impact. That unusual pattern reveals weak demand," the agency said.
"We expect a similar softness throughout the first part of 2013."
Magna says that English-speaking national network TV will be
impacted by these trends, with revenues decreasing by 6.4% (or 1.8% without
political and Olympics) in 2013. "National cable will continue to benefit from
better ratings and gain market share from broadcast: revenues will thus grow
4.0%," Magna said.
Local TV is forecast to grow 1.4% on a normalized basis and
drop 9.1% when including political advertising.
Overall, Magna expects ad spending on what it calls core
media to rise by 0.6% in 2013, or 2.7% without the effects of political and
Olympic spending. Digital media is expected to have double-digit growth to
$41.5 million, with mobile rising 55% to $4.5 billion.
"The concept of mobile advertising started with smartphones
but tablets are changing everything, rapidly establishing themselves as
universal media players (TV programs, movies, radio, news, magazines) in a way
never achieved through 'personal' computers," said Vincent Letang, executive
VP, director of global forecasting at Magna.
"Despite the complexities in the ecosystem, the difficult
upgrade of media measurement and the painful redefinition of many business
models, Magna Global believes we have only scratched the surface of this new
world: advertising on mobile devices is forecast to grow to $11.5 billion in
the next five years and by 2017 it will represent 18% of total digital
advertising and 6% of total media advertising in the U.S.," Letang said.
In terms of spending categories, Magna is expecting
technology, personal care and retail to be positive, while ad spending from
pharmaceuticals and food will show little or no growth.