US Adspend To Fall 7.4%, Says VSS

25 February 2009

NEW YORK: Veronis Suhler Stevenson, the private equity firm, predicts US adspend will fall by 7.4% in 2009, with newspapers particularly set to suffer as the economic downturn continues to impact the media industry.

Veronis's new "Mid-Term Forecast" suggests total newspaper revenues will contract by 16.2% this year, following a 13.5% slide in 2008, confirming previous, and equally pessimistic, forecasts about the medium's potential prospects during 2009.

Broadcast television is likely to see revenues decline by 9% in 2009, having been flat last year, while consumer magazine revenues will decrease by 8.5%, and broadcast and satellite radio by 7.2%.

Marketing services, such as direct marketing, promotions and branded entertainment, will also see spending levels drop 1.3% on 2008.

By contrast, the "pure-play" internet and mobile sector – that is, firms trading solely online or via mobile phones – is set to grow by 9.1%, though this figure is down from a previous estimate of 15.5%.

Spending on mobile content will also increase by over one third, and professional and business information revenues will rise by 5.1%.

Ratings agency Standard & Poor's has also recently issued a report saying the media and entertainment sectors are among those most at risk from the downturn due to high levels of debt.

In a memo to staff following the departure of Peter Chernin, News Corp's president/coo, earlier this week, Rupert Murdoch also argued "no company is immune" to the downturn, and that now is the time to "streamline and enhance" operations.

Data sourced from Street Journal/AllThingsD; additional content by WARC staff