Barclays Capital suggests network TV will see a 12.7% increase in ad spending in 2010. The forecast is part of an upbeat note issued March 26 by entertainment analyst Anthony DiClemente. The estimate includes spending on the Olympics and the World Cup by marketers. The previous estimate had been for growth of 10.1%.
DiClemente thinks overall ad spending this year will be up 5.5% in the U.S. His prior estimate was for a 3.5% increase on last year.
His more buoyant expectations for the ad market will no doubt be welcome news as TV sales executives are in the midst of preliminary upfront meetings with agencies.
While estimates vary, the TV upfront was down around 15% last year and for the full year network TV was down 9.5% in 2009 to $60.3 billion, according to the latest figures from Kantar Media, formerly TNS Media Intelligence. A boost of almost 13% would indicate that network TV could regain last year's CPM losses and add a little more on top.
Barclays Capital also predicts ad spending on national cable will be up by 6.5%, a half a point better than the prior estimate. The estimate change for local TV is much more aggressive however. DiClemente forecasts station group ad revenue could grow as much as 23.3% in 2010. The previous estimate was for 17.2% growth. (The estimate includes political spending.)
In the investor note, the analyst said three factors were driving his more positive assumptions: continued strength of the auto marketplace and upward revisions for March from JD Power & Associates; more clarity about the Supreme Court decision lifting restrictions on corporate spending on federal candidates and "continued positive commentary by the big seven entertainment companies regarding double-digit scatter pricing growth."
But even with his higher projections, DiClemente feels most media stocks already adequately reflect investor expectations of a healthier ad environment.