Ad Market Rebounds

September 9, 2010

The US ad market will rebound with 3% growth this year, according to new estimates from SNL Kagan.

Total Ad Market Will Top $210B
Projections in the study “Advertising Forecasts: US Market Trends & Data for All Major Media” indicate the total market is projected to rebound 2.8% to $210.5 billion in 2010, following two consecutive years of declines. SNL Kagan predicts that the sectors with the strongest growth this year will be mobile, broadcast TV stations and internet, while business publications and newspapers will show the largest declines.

SNL Kagan also forecasts the market will continue to grow, reaching $214.3 billion in 2011 and $275.8 billion by 2019.

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Old Media Future Looks Dim
Despite the general rebound in the US market, SNL Kagan does not expect all sectors to benefit. In particular, SNL Kagan indicates that it is unlikely old-media sectors will recover from the flight of ad dollars to new media.

For example, daily newspapers are expected to generate about $23 billion in ad revenue during 2011, a 45% drop from $42.2 billion in 2007. Looking further ahead, losses are expected to level off, with projected revenues of $22.5 billion in 2019.

In addition, direct mail ad revenue is expected to drop almost 27%, from $60.3 billion in 2007 to $44.2 billion next year. However, direct ad will remain the top US ad sector by revenue.

However, not all is lost on the more traditional front. Cable TV is projected to remain strong. SNL Kagan forecasts the sector will grow to $30.2 billion in 2011, up about 21% from $24.9 billion in 2007, and eventually reach $55.1 billion in 2019.

New Media Brightens
New media sectors are expected to drive the bulk of the rebound in the US ad market. Most notably, internet ad revenue should reach $27.8 billion next year, representing impressive 33% growth from $20.9 billion in 2007. By 2019, internet advertising is expected to reach $60.1 billion.

Online Ad Growth Outpaces Total Ad Growth
Online advertising will grow at a faster pace in 2011 than overall advertising, according to estimates from Borrell Associates, whose analysis indicates total online ad spending (including mobile) will grow almost 14%, from $45.6 billion in 2010, to $51.9 billion in 2011. Overall, advertisers will increase their spending next year by less than 5% above this year’s projected level, bringing US ad spending totals to $238.6 billion. This means online advertising will account for about 22% of total ad spending.

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