Campaigns and Games will rescue U.S. TV advertising in 2012

Michelle Clancy ©RapidTVNews | 25-01-2012

Political advertising, and, to a lesser extent, the Summer Olympics, is set to rescue struggling advertising growth in the US amidst a weak economy.
According to new research from MAGNAGLOBAL, taken together the campaigns and the Games will help to generate a year-on-year revenue growth of 3.7% in 2012.
In terms of performance by media category, broadcast television will benefit the most from the political bonanza. The category is expected to grow by 8.5%, while total television will grow by 6.8% to $62.4 billion. Helping things along is a relaxation of campaign finance rules by the Supreme Court in 2010, so that super political action committees (PACs) are now allowed to raise and spend almost unlimited amounts to run political or "issue" advertising.
"These new [Super-PAC] rules, combined with the intensity of the political battle (evidenced already by the Republican Primaries) and the high number of swing states, are likely to generate the highest ever political spending in 2012: $2.5 billion just for television," said Vincent Letang, head of global forecasting. "The Olympic Games broadcast will generate an incremental $630 million, bringing the total Political and Olympic (P&O) impact to a record $3.1 billion for television alone."
When it comes to the overall advertising market, advertising growth slowed down gradually through 2011, following the economic trends (high unemployment, tough credit requirements for financing large purchases). Media owners' advertising revenue grew just 2.3% in Q3 and 1.1% in Q4, compared to 4.3% in the first half. Overall, MAGNAGLOBAL estimates that core media revenues (excluding direct marketing categories) grew by 2.9% in 2011 to $147.4 billion.
Also, despite the combined growth of 2010 and 2011, the U.S. advertising market is still 13% smaller than what it was in 2007 ( now totalling $168.7 billion).
There are some exceptions to stagnation however. Researchers see Internet advertising revenue growth to slow down somewhat in 2012, due to maturity, but still see double-digit increases (+10.9%), driven by paid search (+12.6%), online video (+22.4%) and mobile (+44.2%). Further, Internet media revenue grew by 21.4% in 2011 to reach 18.2% in market share.
Outdoor media will also grow this year, by 4%. All other core media categories will struggle in 2012, including newspapers (-6.0%), magazines (-5.2%) and radio (-0.8%).