Forecast: Economy Back On Track, Online Advertising Growth Adjusted Up

This year, online advertising will once again prove to be the fastest-growing medium, with paid search alone rising 16.8%, according to a new report from Mediabrands' Magna media research unit. "Local media is generally likely to perform better than we had previously forecast as well," said Brian Wieser, EVP at Magna Global.

Overall, media suppliers are expected to generate $164.5 billion dollars of ad revenue this year.

"On the back of continued improvements in the economy and an increased likelihood of sustained growth in the near-term, Magna forecasts that excluding political and Olympic advertising on TV on a normalized basis, the U.S. advertising economy will grow by 1.6% during 2010, ahead of our prior forecast of flat year-to-year growth."

Including political and Olympic advertising, Magna expects 3% total industry growth for the year.

As expectations for the broader economy have improved over an extended time frame as well, Magna increased its long-term forecasts, and now expects growth to average 3.5% between 2010 and 2015 -- up from +2.3% previously.

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Among the various sectors, television remains the largest advertising platform in the United States, generating $56 billion in total advertising revenues during 2010.

Manga's U.S. advertising revenue forecast was accompanied by the release of its undated forecasting model, which included detailed data for more than 40 categorizations of media on a quarterly basis from 1990 to 2011, and on an annual basis from 1980 to 2015.

Helping to drive online advertising is the continued adoption of broadband Internet access nationwide. Indeed, even without government assistance, Magna recently predicted that Internet access will grow 30% to just over 100 million U.S. households in six years.

Growth will take place "as a consequence of pre-existing competition and increased availability of triple-play services and tiered broadband services, which have the effect of lowering pricing for many consumers," Wieser said in the report.

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