Magna: Smaller Ad Growth In 2012, Broadcast TV, Nets See Biggest Rise

by , Jan 24, 2012, 11:05 AM
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The U.S. advertising business slowed down at the end of 2011, and although MagnaGlobal expects growth to improve in 2012 -- up 3.7% -- it could be viewed as a weak performance.

Much of the 2012 gain comes from the usual suspects -- a big political advertising year, as well as the marketing for the Summer Olympics. The media agency unit predicts U.S. advertising will land at $152.9 billion for 2012.

Taking out political and Olympic advertising, MagnaGlobal says core media advertising revenues will climb by 2.0% in 2012, to $149.8 billion. That would be a slowdown compared to 2011’s core media growth of 4.5%.

Advertising growth for the third quarter of 2011 was 2.3%, and slowed to 1.1% in the fourth quarter. This came after a robust 4.3% gain in the first six months of the year. Looking at core media revenues for 2011 -- but not direct marketing -- marketers' existing business was up 2.9% in 2011 to $147.4 billion. This is still 13% below pre-recession levels in 2007 when the business topped out at $168.7 billion.

The biggest category -- broadcast television -- will gain from political and Olympic advertising, up 8.5% for the year. Total television -- cable, syndication, broadcast and local -- will grow by 6.8% to $62.4 billion.

The biggest gainers in 2011 will also be the biggest in 2012: Internet marketing/advertising -- with a 10.9% gain in 2012, says MagnaGlobal. But this is down from the growth in 2011 of 21.4%. Specifically, paid search will grow 12.6%; online video, 22.4%; and mobile, 44.2%.

Outdoor media will climb 4.0%.

Declining categories for 2012 include: newspapers, off 6.0%; magazines, down 5.2%; and radio, losing a bit, 0.8%. Also on the losing end is direct marketing: directories' revenues will decline 19.1% and direct mail, 1.9%.

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