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Ad Spending Continues 2009 Spiral, Forecasts Slightly Better for 2010

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.

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.