US advertising market set to stabilise, says Magna

21 January 2010

NEW YORK: The US advertising industry should see trading conditions begin to stabilise by the second quarter of this year, according to a new forecast issued by Magna, part of Interpublic Group.

Using a methodology based on the revenues of media owners rather than agency billings, the company expects total ad revenues to rise by 1.4% in 2010, to $164.3 billion (€116bn; £101bn).

When its totals were "normalised" to exclude expenditure linked to either political contests or the Olympics, however, this headline figure stood at a modest contraction of 0.1%.

National revenues will expand by 1.9%, to $57.3bn, while local returns will decline by 4.8%, to $58.4bn, the media services firm estimated.

Year-on-year growth should return in the second quarter, based on projections relating to industrial production and consumer spending, Brian Wieser, svp, director of global forecasting at Magna, argued.

Looking ahead, he said media providers should see their advertising sales improve by 0.4% in 2011, to just under $165bn overall.

During the period from 2010-15, "normalised" revenues will record a compound annual growth rate of 2.3%, according to Wieser.

Warc's most recent Consensus Forecast found that US adspend would fall 1.4% in 2010, based on a weighted average of predictions from ad agencies, media companies and industry associations.

Data sourced from Magna; additional content by Warc staff