US ad revenue sees modest growth

Michelle Clancy ©RapidTVNews | 02-05-2012

Although it was a rough year, advertising revenue in the US grew 1.6% in the fourth quarter of 2011, according to metrics from MagnaGlobal. The problem however is that TV revenue in particular was down 2.3% in the quarter.

Looking at the full-year totals though, television had a good year on a normalised basis, as revenues grew 5.4% to $58 billion. Due to the absence of Olympics and low political activity in 2011 (compared with the mid-term cycle of 2010), actual television revenue grew by a more modest 1.2% year-on-year.

The firm estimates that for full-year 2011, US ad revenue grew 3.1% to $171.7 billion, with Internet media experiencing, the strongest growth (21.9% compared to 12.6% in 2010) and reached a market share of 18.4%. Mobile Internet advertising revenue grew 149% in 2011 to about $1.6 billion, representing 5% of total Internet advertising.

For 2012, the economic outlook remains fragile. The latest economic results and forecasts still point to a tepid recovery by historical standards, the firm said. Expectations for GDP growth and job creation, which are key variables in predicting media spending growth, remain cautiously positive.

To wit: In February, the Philadelphia Federal Reserve left its 2012 real GDP growth forecast essentially unchanged at 2.3%. The latest Jobs Report showed unemployment rate stabilising at 8.2%, with fewer new jobs than in preceding months. According to the latest University of Michigan’s survey, the consumer confidence index was 76 in March, showing no major improvement from 2011 level and still far from the pre-recession levels (97 in January 2007).

In that context, Magna continues to forecast a slow-down in advertising revenue growth in 2012, compared to 2011. Excluding political and Olympic ads, core media owner advertising revenues (TV, internet, radio, newspapers, magazines and out-of-home) will grow 2.2%.

When including P&O, core media advertising will increase by 4% in 2012.