U.S Ad Growth to Jump 3.1% This Year, Forecast Says

MagnaGlobal predicts cable networks ad spending will increase 10.8% amid continued market share gains, exceeding projected 2.4% growth for broadcast networks.

NEW YORK -- MagnaGlobal, part of advertising conglomerate Interpublic, said Monday that underlying U.S. ad growth for 2010 came in at 3.2 percent, ahead of its previous projection, and reiterated its forecast of 3.1 percent underlying growth in 2011 from the higher year-ago base.

Cable networks, which grew ad revenue 12.4 percent last year, will once again be key winners in 2011 and will outperform broadcast networks as cable continues to attract ad dollars, it said.

In December, MagnaGlobal had made its latest forecast, which called for U.S. ad growth of 2.8 percent in 2010 when excluding the year's benefits from elections and the Olympics. On Monday, the prognosticator said growth ended up at 3.2 percent on that basis to hit $167.9 billion. Including elections and Olympics, overall 2010 ad spending would have amounted to $170.5 billion.

"Fourth-quarter growth of 4.5 percent represented the best performance of the year, amid improvement in personal consumption expenditures  and industrial production, both key drivers of advertising growth," the company said.

For 2011, MagnaGlobal still sees ad revenue growing by 3.1 percent on an underlying basis, which is now a slight slowdown from 2010, to $173.1 billion. But its estimate is an even lower 1.8 percent when including the impact of political and Olympic advertising in the 2010 figures.

MagnaGlobal sees cable networks ad spending increase 10.8 percent this year, outpacing a projected 2.4 percentbroadcast network gain.

"Increasingly, large advertisers with reach and frequency goals are turning to network cable as an alternative national mass medium to broadcast TV, attracted by lower rates and broader options," the firm said.

National digital advertising also remains a major growth category, according to MagnaGlobal, which forecast gains of 18.7 percent this year "driven not only by very strong growth in display [advertising], but also by online video and mobile."

Email: Georg.Szalai@thr.com
Twitter: @georgszalai

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