2012 U.S. ad revenue set to decline

Michelle Clancy RapidTVNews | 12-10-2011

The 2012 U.S. advertising revenue forecast has been revised down from 4.8% to 2.9% overall, thanks to the weak economy in that country.
However, TV will be the fastest growing medium after online in 2012, with advertising revenues increasing 7.1% compared with onlines 11.6%, according to researcher MAGNAGLOBAL. Television in particular will benefit from the quadrennial bonanza. The 2012 elections and the Summer Olympics in London will generate incremental revenue of $3.1 billion for television: $2.5 billion in political advertising (the highest spending ever, mostly on local broadcast television) and $633 million around the London Olympics (up 5.5% compared with Beijing 2008, and primarily fuelling national broadcast TV revenues)."
Nonetheless, overall, "A slowdown in real personal consumption expenditures, manufacturing activity, and ongoing problems in the labour and housing markets all contribute to our revised outlook," said the firm. "Our estimates are further impacted by continued disinflation."
The forecasts encompass core media categories including television, Internet, print, radio and outdoor, as well as direct marketing categories (direct mail, directories). Excluding direct marketing components, the revenue growth of core media categories is estimated at 2.9% in 2011 and 4.3% in 2012.
Meanwhile, the 2011 advertising revenue forecast for the US is expected to hold steady at 1.6% growth, with media suppliers expected to generate $173.5 billion of advertising revenues in 2011, including the impact of political and Olympics (P&O) advertising.
Despite the revision for next year, MAGNAGLOBAL characterises the economy as seeing slow-but-positive economic recovery in 2012, so media suppliers advertising revenues will continue to recover from the severe recession of 2008-2009. MAGNAGLOBAL expects revenues to reach $178.5 billion in 2012, which is still significantly less than the pre-recession level of 2007 ($206.1 billion).