• by Joe Mandese  @mp_joemandese, March 26, 2020

Citing an "unprecedented situation created by the Coronavirus outbreak and economic downturn," IPG Mediabrands' Magna unit has revised its 2020 U.S. advertising outlook downward by 8.5 percentage points. Magna, which originally forecast in December 2019 that the U.S. ad market would expand 5.7% this year, now projects it will decline 2.8%.It is the first of the major agency holding companies to weigh in with an official post-COVID-19 revision.

Most of the decline was attributed to a devastating decline in "linear ad sales" of 12%, given the lost of marquee TV sporting events such as the Olympics, the NCAA's March Madness and most if not all professional sports.

On the bright side, much of that economic advertising activity -- including the Tokyo Olympic Games -- will be postponed until 2021, and Magna has revised next year's ad outlook up to a growth rate of 2.5% from the tepid 1.4% in forecasted in December.

"This new market scenario is based on Magna’s statistical model fueled by 40 years of data, and by the latest forecasts from macro-economists, who anticipate real GDP shrinking by -1% to -4% this year, compared to a forecast of +2% pre-coronavirus. 6," the agency writes in its revised report. "At this stage, the total market decline anticipated (-3% or -$6.2 billion vs. 2019) remains less severe than the decline experienced in 2008-2009 (-20% or -$33 billion vs 2007), mostly because of the weight and resilience of digital advertising today.

While Magna is the first of the big agency forecasters to officially revise its ad outlook, Zenith Media's Jonathan Barnard intimated he was close to announcing a revision in light of the pandemic and economic fallout.

In December, Zenith forecast that the U.S. ad economy would expand 4.7% in 2020.

Based on Magna's update, MediaPost's Research Intelligencer has updated its running big agency holding company "consensus" outlook, but expect that to change soon based on other imminent revisions.

During a presentation at an Advertising Research Foundation "virtual" Town Hall today, GroupM Business Intelligence Global President Brian Wieser gave no indication he was close to announcing revised outlook, but the agency's previous forecast for the U.S. this year was by far the most aggressive: +7.1%.

In terms of the impact of Magna's revised outlook on individual media, the agency predicts national and local TV, radio and print will be most adversely affected, while digital will also sustain significant single-digit losses. (See revised outlooks by medium below).