MADRID: The outlook for the Spanish advertising market is gradually improving, but revenue levels are still expected to decline this year.

Based on a regular survey of senior executives, Zenith Media, part of Publicis Groupe, stated that Spanish adspend would decrease by 2% year-on-year in 2010.

This would actually constitute the best performance recorded in the country for three years, and also marks an improvement from the contraction of 2.9% forecast by Zenith Media in March this year.

One major factor behind this trend has been the introduction of new laws restricting the amount of advertising than can be shown on TVE1 and TVE2, the two main publicly-funded TV stations.

As a result of this development, mainstream channels such as Antena 3 and Telecinco have benefited from higher demand and increased their media rates due to the overall reduction in inventory.

However, while Zenith Media argued these mainstream broadcasters would see their revenues leap by 24%, it also warned the dramatic inflation in prices could alienate brand owners if it continues going forward.

Elsewhere, the web is set to enjoy an expansion of 10.4% in 2010, including an uptick of 11.8% for video ads and 9.3% for paid search.

Social networks are set to deliver returns of €13.9m ($16.9m; £11.6m) this year, a figure that had leapt by 18.8% when measured against Zenith Media's prediction in March.

Blogs will receive some €7.1m from marketers seeking to leverage user-generated content to connect with consumers, which is 7.6% more than was outlined in the study published earlier this year.

Mobile advertising budgets are set to jump by 12.1% in 2010, but despite its "great promise" this emerging channel will still only take a small market share.

In contrast, newspaper ad sales are set to slide by 7.6%, with free press titles down by an even more substantial 12% for the year as a whole.

Magazines will also see totals tumble by 9.3%, indicating the considerable challenges that remain in place for the print category.

Radio will post a more modest drop of 1.5%, with outdoor off by 4% and cinema by 6.2%, according to Zenith Media's estimates.

Data sourced from Europa Press; additional content by Warc staff