Magna Global Revises Ad Forecast, Dips To 3.1% Growth In '13
Interpublic Group's Magna Global media unit has lowered its forecast for the global advertising economy, partly as a result of the slower-than-expected recovery by Western Europe economies.
It now says the global advertising economy will grow 3.1% in 2013 -- 1.4% less than its previous projection in June of 2012, which was 4.5%.
For this year, Magna has also downgraded its estimate -- by 1.0% -- as a result of the troubled Western European ad economy. Global media companies in 2012 are projected to see their advertising revenues grow by 3.8% to $495 million.
Magna says the U.S. remains the largest market with $153 billion in advertising revenues for 2012 -- 4% higher than 2011, mostly due to higher political and Olympic advertising spending. Without such drivers next year, the U.S. will grow 0.6%. Take out the usual two-year bump from political advertising and the Olympics, and the U.S. will rise 2.6%.
Global digital media will continue be a big media star -- rising at double-digit percentage increases, estimated to grow at 13.5% next year. Paid search will continue to lead digital media, growing 14%. But banner display advertising is growing less than half this overall rate at 6%.
Mobile advertising will climb to $24 billion globally in 2017, from $6 billion now. Currently, mobile represents 6% of all global digital advertising and 1% of total advertising. These numbers will climb to 14% of all digital advertising and 4% of all advertising revenues.
Online advertising will become cheaper as programmatic buying continues to grow, says the Interpublic media unit.
Global television continues to be the dominant media category -- up 5% in 2012, it had a strong year as a result of political and Olympics advertising. For 2013, Magna says growth will slow down to gain only 2.3%, mostly due to lower results in the U.S. market. Magna says U.S. television represents about a third of global television -- $62 billion of a $202 billion global market.
Next year, in the U.S. -- without the political and Olympics advertising revenues -- national English-speaking TV networks will decline 3.6% in revenues with local TV stations down 9%. Helping out U.S. TV overall, national U.S. TV cable networks will grow 4.6%.
Global radio was another media gainer in 2012 -- albeit at a much slower pace than TV, a 1.6% hike despite a shrinking share of audience. Next year, radio will grow at about the same levels, at 1.5%. Magna says because radio is five times cheaper than national TV or eight times cheaper than print, it will be in demand and should be able to increase its rates in 2013.
Out-of-home, a smaller media category, also climbed in 2012 -- up 6.1%, benefitting from the rise of digital formats. Out-of-home ad sales (including cinema) will increase by 3.4% in 2013.
Worldwide newspapers were down 4.5% and magazines were 5.7% lower in 2012. There will be some cutting of losses in 2013: newspapers down 3.4% and magazines off 4.3%.
U.S. digital advertising revenues will be up 11.6% in 2013; newspapers will be down 6.7%; magazines will drop 7.8%; radio will see flat revenues; and outdoor and cinema will grow 4.4%.
The report says real global gross domestic product growth for 2013 will average a 3.3% hike globally, according to the October update from the IMF. This is slightly below IMF’s July prediction, where it estimated a 3.5% projection.
In 2014, with the expectation of a stabilizing global economy, Magna expects a stronger advertising growth in 2014 -- up 6.0% -- and 4.9% improvement in 2015.