Citing the “fragility” of the U.S. economy, Interpublic’s Magna Global unit this morning updated its outlook calling for only a 2.2% expansion in U.S. ad spending this year. The
analysis, which is based on projected ad revenues for “media owners,” estimates that the U.S. ad economy grew only 1.6% during the fourth quarter and 3.1% for full-year 2011, which Magna
Global said represents a small upward revision for the 2.9% rate of growth it projected in its last forecast issued in January. Those estimates exclude the effects of the Olympics and election
spending. Including those sources of incremental spending, Magna Global estimates the U.S. ad economy grew only 1.7% in 2011, a tenth of a percentage point more than the 1.6% it forecasted in
January.
“Looking at key media categories, television advertising revenues (including political and Olympics) were down -2.3% and Internet was up 18.8% in Q4,” Magna writes in its
new report. “On a full-year basis, Internet media experienced the strongest growth (21.9% compared to 12.6% in 2010) and reached a market share of 18.4%.
“Mobile Internet
advertising revenue grew 149% in 2011 to about $1.6 illion and represent 5% of total Internet advertising. The first-ever mobile estimate published by Interactive Advertising Bureau in April 2012
based on a survey of their members, proved extremely close to the previous estimate by Magna Global. television had a good year on a normalized (ex. P&O) basis, as revenues grew 5.4% to $58.0bn.
Due to the absence of Olympics and low political activity in 2011 (compared with the mid-term cycle of 2010), actual television revenue, including P&O, grew by a more modest 1.2%
year-on-year.”
Reiterating the “fragile” nature of the U.S. economy, Magna said it “continues to forecast a slow-down in advertising revenues growth in 2012, compared
to 2011. Excluding P&O, core media owners advertising revenues (TV, internet, radio, newspapers, magazines and out-of-home) will grow 2.2%. This represents a small increase compared to our
previous forecast published in January (2.0%) and remains less than half the 2011 growth (4.8%).The increase is entirely due to an upward revision in our digital media forecast, following a strong
4Q11 and a strong 1Q12.”