Barclays Goes From Up To Down For 2010

arrow down A leading Wall Street firm has offered more dour news on the ad market's prospects this year and next. In a Thursday report, Barclays Capital adjusted downward its spending forecast to a 13% decline in 2009. And perhaps more tellingly, Barclays switched a projection of a slight increase in 2010 to a decline.

Three months ago, the firm offered projections of a 10% drop in 2009 and a 1% uptick next year. Now comes the steeper 13% fall--and the 1.5% projected decline in 2010.

Barclays is projecting GDP to be up 4% in 2010--but an ad market recovery tends to lag a macroeconomic turn by perhaps six months, likely accounting for the predictions of another revenue decline next year.

A 13% decline this year (to $242.9 billion) would be significantly greater than what occurred during the prior two recessions--which brought a 1.9% drop in 1991 and a 6.2% decrease in 2001, with the burst of the Internet bubble and 9/11 crisis as factors then.

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Barclays' projections come from an aggregate of 11 media sectors. Not surprisingly, local TV stations, newspapers and magazines are projected to suffer the most in 2009--all down in the 20% range. Also unforeseen: radio is forecast to fall 15.1%.

While Barclays projected cable TV ad dollars to fall 5% versus its previous 3% projection, the gap between its December forecast for broadcast changed dramatically from a would-be 10% fall to 17.5%. The Internet, which would account for 10% of ad spending in 2009 per Barclays, is projected to post 2.3% growth this year. While display advertising is forecast to be slightly down, search is predicted to rise 8%. In 2010, the forecast calls for a 5.7% growth in the Internet sector, with display back on the rise.

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