MagnaGlobal Cuts U.S., Global Ad Forecasts for 2011
Citing economic factors, it lowers its U.S. outlook from 3.1 to 2.9 percent growth and its global estimate from 5.6 to 5.2 percent.NEW YORK - MagnaGlobal, part of advertising conglomerate Interpublic, on Thursday reduced its 2011 U.S. advertising forecast, citing economic reasons.
The company now projects $173.1 billion in advertising spending for the year, or 2.9 percent growth, excluding the impact of political and Olympic advertising, instead of the previously predicted 3.1 percent, "in light of recent economic reports."
"While we see the disruption from the earthquake in Japan and high gas prices as temporary, the economy still suffers from a depressed housing market, sluggish employment conditions and fiscal retrenchment at all levels of government," MagnaGlobal said.
It cited online, network TV and cable TV advertising as doing well.
It expects national TV to grow 7.9 percent in 2011, up from its previous estimate of 6.5 percent.
"Despite upward revisions to national mass media, signs of a slowdown are concentrated in local mass media, driven by weakness in newspapers, radio and outdoor advertising," MagnaGlobal said.
Following an 8 percent rebound in global ad revenue in 2010, the firm projects a 5.2 percent to $428.4 billion on a constant currency basis this year. That is down from its previous 5.6 percent estimate.
It did, however, upgrade long-term growth rates "reflecting stronger expectations for emerging markets through 2016." It now eyes a compound annual growth rate for the global industry of 6.8 percent over the next five years, compared to 6.3 percent previously.