UBS Downgrades Ad Spend Forecast, Online to Grow Just 1.4%

February 16, 2009

This article is included in these additional categories:

Agency Business | Financial Services | Newspapers | Television | Trade Shows & Events

UBS Equities has downgraded its ad spending forecast for the new year: The new global estimate for online revenues, is now 1.4% growth, compared with UBS’s old estimate of 10.4% growth.

The firm expects that in 2010, the worldwide online ad market will be back to double-digit increases, writes paidContent (via MediaBuyerPlanner).

As for the suffering newspaper ad industry, UBS expects global ad revenues to drop another 11.7% in 2009, following a 6.7% drop in 2008. Ad revenues will continue to slide in 2010, with an expected 2.8% drop. US newspapers will fall more than the global market, plummeting 19.4% this year, followed by an 11.4% drop in 2010.

Magazines will drop 8%, revised downward from the 3% drop UBS was predicting last fall.

In December, ZenithOptimedia cut its forecast for 2009, predicting that US? ad spending overall would fall 6.2%. That was down significantly from its previous revision, in October, when the group was calling for 0.7% growth for the year.

While ad spending overall in 2009 will suffer, Zenith believes a recovery will begin in the second half of the year, with mild year-on-year growth compared to the difficult second half of 2008.

UBS points out (via MediaPost) that Madison Ave. is experiencing longer-term, secular shifts that are in the process of transforming the advertising economy. Those shifts could affect the advertising market beyond the current economic cycle.

Advertising will decline relative to the GDP in 2009 and 2010, the firm predicts.


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