MagnaGlobal Cuts Global Ad Forecasts for 2011, 2012

It cites a "worsening economic outlook," but sees the Internet and China continue to rise and growth accelerate next year due to the Olympics and other quadrennial effects.

NEW YORK - MagnaGlobal, a unit of advertising giant Interpublic, on Monday cut its global advertising forecasts for 2011 and 2012, citing a "worsening economic outlook." But the positive effect of quadrennial events, such as the Summer Olympics, European soccer championship and U.S. presidential elections, will boost ad growth next year compared to 2011, it said.

In the U.S., the company sees its 2011 growth forecast, which it recently lowered to 2.9 percent, intact. For 2011, MagnaGlobal now expects global ad growth of 4.7 percent, instead of the previously eyed 5.2 percent, to $427 billion, the firm's Vincent Letang told the UBS Media and Communications Conference here in its much-anticipated opening session. ZenithOptimedia CEO Steve King also presented his latest ad outlook.

For 2012, Magna now calls for global growth of 5.0 percent, down from 6.5 percent previously, to $449 billion.

"Quadrennial events, combined with the scale and dynamism of the BRIC countries will help sustain global growth despite worsening economic outlook," the company said.

The Internet will become the second biggest media category behind TV in 2011 and reach a 20 percent global market share in 2012, the firm forecasts.

And it sees China becoming the second largest advertising market in 2012, outgrowing Japan.