Friday, January 22, 2010

Ad Revenues Upgraded to Flat in 2010

(Excerpt from Radio Ink, 1/22/10)

Corrected: Magna Predicts Flat Ad Revenues In 2010

Correction: An earlier version of this story included an incorrect percentage in Magna's radio revenue projection for 2011. Radio Ink regrets the error.

January 21, 2010: Magna, a division of IPG's Mediabrands, has updated its U.S. advertising revenue forecast and is now projecting that ad revenues will be essentially flat this year, with a 0.1 percent decline, to $161 billion. That's compared to Magna's earlier projection of a 1.3 percent falloff.

For the first quarter, Magna sees 3 percent less advertising revenue on a normalized basis, falling to $36.8 billion from $38 billion in Q1 2009. That reflects, the company said, "a moderating pace of decline" compared to a 7 percent drop in ad revenues in Q4 of last year and a 15 percent decline in Q3 of '08.

For local radio, Magna projects $12.8 billion in ad revenues in 2010, down 2.5 percent from 2009's $13.1 billion. That follows a 20.9 percent ad decline last year. But Magna is also predicting a 1 percent year-over-year drop for local radio in 2011, to $12.6 billion. For network and satellite radio, Magna projects revenues of $1.1 billion in 2010, up 2 percent year-over-year, and a gain of 3 percent in 2011, to $1.2 billion.

Local TV, meanwhile, is expected to be off 10 percent in 2010, to $14.3 billion from $14.5 billion, but will move back up by 10 percent in 2011, to $14.5 billion. Local newspapers were off 27.2 percent last year, and Magna expects that to drop by 0.7 percent in 2010, to $21.8 billion, with another 5 percent drop, to $20.7 billion, in 2011.

For local digital, Magna projects growth of 2.7 percent in 2010, to $3.5 billion from $3.4 billion in '09, and a further gain of 7.3 percent, to $3.7 billion, in 2011.

Magna covers political and Olympic spending separately to avoid skewing its look at underlying trends, and estimates that local TV will see about $2.7 billion in political advertising this year, as well as about $488 million in incremental revenues from the Olympics.

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