Cable Revs Inch Up in 2011; Digital Rockets


On the eve of the TV advertising upfront markets, MagnaGlobal has reiterated its U.S. advertising numbers for 2011.

The big media group, part of IPG's Mediabrands, sees a 3.1% rise in 2011 -- when taking out comparisons to big 2010 major political and Olympics advertising results. When including those revenues and comparisons, Magna says growth will be just 1.8% for 2011 to $173 billion.

But problems for the advertising business remain.

Fourth-quarter 2010 growth was at 4.5% and represented the best performance of the year, including improvement in personal consumption expenditures and industrial production -- both key drivers of advertising growth. But there is continued weakness in several key economic indicators.

MagnaGlobal says the momentum will moderate in the second half of this year, leaving its forecasts mostly unchanged. The big movers this year, starting with the upfront advertising marketers, are U.S. cable networks.



National cable networks, one of the main beneficiaries of the advertising recovery in 2010, grew 12.4% and should add on another 10.8% in 2011. Cable will easily outpace national broadcast networks, which are pegged to grow at 2.4%. MagnaGlobal's analysis is that large advertisers with reach and frequency goals are turning to cable as an alternative to broadcast TV, due to lower prices.

National digital advertising will also rise sharply -- 18.7% -- thanks to revenues from display, online video and mobile platforms. The biggest digital category -- paid search -- will also continue to be strong.

Direct media category -- which includes Internet Yellow Pages, paid search, lead generation, directories and direct mail -- will only move up by 0.8% in 2011, underperforming other mass-media options.

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