Ad Spending Continues 2009 Spiral, Forecasts Slightly Better for 2010

March 13, 2009

This article is included in these additional categories:

Broadcast & Cable | Financial Services | Magazines | Newspapers | Radio | Television | Videogames

Advertising spending continues in a downward spiral this year and will drop 12% in 2009, although signs indicate there may be somewhat of a leveling off in 2010, according to a recently released Media Business Report from Jack Myers.com Media Network.

The Myers report predicts a double-digit drop in total ad spending in 2009, following a 4% decline last year. It also projects this decline to continue into 2010, with a 5% dip for the full year, albeit off of a smaller base.

Newspaper advertising will among the hardest hit this year, with a 22.5% decline, on top of a 17% drop last year, the report said. This decline will be surpassed only by an expected drop of 25% in local, regional and spot cable TV ad buying. Other media to be hard hit include print Yellow Pages, terrestrial radio and magazines.

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Among the brightest spots will be video game and mobile advertising, which Myers projects will grow 12% and 9% this year, respectively. Other resilient categories include online video/social networks (8.6%), online search (7%), branded entertainment/product placement (4%) and satellite radio (3%), according to Myers data.

US advertising peaked at $234.7 billion in 2007, up 3% from 2006, according to Reuters. In 2010, domestic ad spending is expected to dip to $187.7 billion.

Myers’ projections are based on fourth quarter 2008 and first quarter 2009 spending, GDP data and a study of the top 100 advertisers by Goldman Sachs, as well as industry analysis, according to a Reuters story on the report.

In related news, Barclay’s Capital revised its previous advertising revenue estimates, forecasting that US ad revenue will drop 13% this year, but improve to a decline of just 1.5% in 2010. Previous estimates called for an ad-revenue decrease of 10% in 2009 and a gain of 1% in 2010.

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