• by Joe Mandese  @mp_joemandese, October 11, 2011

Interpublic media market intelligence unit Magna Global just released an update to its U.S. advertising outlook, and is leaving its growth estimate unchanged at 1.6% for 2011. Magna said the estimate includes the impact of any incremental ad spending related to political campaigns and the Olympics, which actually should not impact 2011 since they’re primarily a factor in 2012. In terms of 2012, Magna cited “persistent weakness in the U.S. economy” as a reason for downgrading its ad growth projection to 2.9% from 4.8% next year, including the effects of incremental spending from political campaigns and the Olympics.

“A slowdown in real personal consumption expenditures, manufacturing activity, and ongoing problems in the labor and housing markets all contribute to our revised outlook,” Magna stated in the release, adding: “Our estimates are further impacted by continued disinflation.”

Excluding direct marketing spending, Magna indicated the revenue growth of core media categories will expand 2.9% in 2011 and 4.3% in 2012.

Magna said national mass media will continue to gain share vs. local, due largely to the strength of digital (online display, video and mobile) and network cable TV advertising.

“Across our three media segments, TV will be the fastest growing medium after online in 2012, with advertising revenues increasing 7.1% compared with online’s 11.6%,” Magna projected, adding: “Television will benefit from the ‘quadrennial bonanza.’ We believe the 2012 elections and the Summer Olympics will generate incremental revenue of $3.1 billion for television: $2.5 billion in political advertising (the highest spending ever, mostly on local broadcast television) and $633 million around the London Olympics (up 5.5% compared with Beijing 2008, and primarily fueling National Broadcast TV revenues).”

Magna said the “direct media” category is undergoing radical change due to digital media. While analogue options such as directories and direct mail continue to make up the bulk of direct response advertising, online Yellow Pages, paid search and lead generation platforms are growing rapidly and taking share, especially as digital technology improves the effectiveness of online media.

“Paid Search growth has accelerated this year to 21.7%, and is expected to maintain double-digit growth in 2012 (13%),” Magna said, noting: “Recent algorithm improvements have helped accelerate cost-per-click trends and have led brands to rely more heavily on search engine marketing and search engine optimization while eschewing low-quality sites. For 2011, we now expect $31.1 billion in total online advertising, up 19.5% vs. 2010.”

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