Despite Cautious Forecast, Mobile, Online Video Double-Digit Ad Drivers
Due to “maturity,” online ad revenue growth will slow in 2012, according to a new forecast from MagnaGlobal. Still, the Interpublic unit forecasts double-digit growth (up 10.9%), driven by three key digital areas, including paid search (+12.6%), online video (+22.4%), and mobile (+44.2%).
Late last year, citing persistent weakness in the U.S. economy, MagnaGlobal revised its 2012 growth forecast down from 4.8% to 2.9%, including politics and Olympics spending.
More broadly, a weak economic environment and high unemployment will result in cautious consumption growth and marketing expenditure, according to MagnaGlobal.
However, as in every quadrennial year, the ad market should benefit from the cyclical incremental ad expenditure generated by the elections -- presidential, congressional and gubernatorial -- and the Summer Olympics.
Due to a relaxation of campaign finance rules by the Supreme Court in 2010, super PACs' free range is also likely to boost ad spending, noted Vincent Letang, EVP and head of global forecasting at MagnaGlobal.
“These new rules, combined with the intensity of the political battle … and the high number of swing states, are likely to generate the highest ever political spending in 2012” according to Letang.
Internet media revenue grew by 21.4% in 2011 to reach 18.2% in market share, MagnaGlobal reports.
Under the current expectations of a slow-but-positive economic recovery in 2012, media suppliers’ advertising revenues will continue to recover from the severe recession of 2008-2009, the company reiterated late last year.
In dollar terms, it said, revenue will reach $178.5 billion in 2012, which is still significantly less than the pre-recession level of $206.1 billion in 2007.