In its report, Barclays said that in 2010, spending should reverse course and increase 1%--but that, of course, would leave the total well below this year. And that 1% projected increase would come even with a Winter Olympics in North America and congressional races.
The 1991 recession caused a 1.9% decline, while the 2001 slowdown brought a 6.2% decrease. Barclays' prediction of a decline next year, far greater than what occurred in the aftermath of 9/11, is stark.
The report was released as Nielsen offered figures showing a slight decline in spending over the first nine months of this year, but that .6% decrease does not take into account the auto category and others' accelerating weakness since Oct. 1.
And the decline also comes despite any tailwinds from spending on the Beijing Games and the wealthy Obama campaign. Cable TV was the sector with the greatest growth--up 8.4% in the January-September period--but spot TV and local newspapers struggled.
The Barclays report offered more troubling news for media companies that are heavily dependent on local advertising. Next year, it predicted that local spending would fall 12.2%, while national would drop 8.4%. Local advertising makes up some 39% of the $252.1 billion U.S. ad market.
Furthermore, even when things are expected to improve in 2010, Barclays forecast that local dollars that would decline an additional 1.4% then.
Amid the storm, Internet advertising should increase 6.1% in 2009, Barclays said--although that is lower than what the firm had projected. That sector would then grow another 12% in 2010. But based on the firm's figures, Internet advertising (display, search, lead generation, etc.) would account for just 10% of all ad spending next year.
Nielsen figures showed that network TV--buoyed by the Olympics--increased .9% for the first nine months of this year. Spot TV for the top 100 markets was up. 7%, but down .2% for the remaining DMAs.
Other Nielsen findings: the auto category was down 8% to $7.9 billion; direct response increased 27% to $2.1 billion; and Procter & Gamble, despite comments last week that it would not cut spending in a downturn, decreased its outlay by 7% to $2.3 billion.
Barclays forecast that local TV stations will experience declines of 15.5% and 1.1% in 2009 and 2010, respectively, while newspapers will fall 17% and 7.5%, and radio will drop 13% and 1.7%.
Even as Nielsen offered figures that cable TV was up 8.4% through September this year, Barclays is calling for it to fall 3% in 2009, but increase 5% in 2010.