The US ad economy will slip 14.5% this year, according to a forecast – the first using a new methodology – from Interpublic’s MAGNA unit, writes MediaBuyerPlanner.
The new methodology uses revenue reported by media vendors rather than the former method of calculating spending by advertisers and brands.
MAGNA estimates the ad industry slipped 18% in the first half of 2009, but predicts that conditions will improve as the year goes on, with a total decline of 14.5%, to $161.4 billion, expected for the year.
Magna predicts that the worst is over and estimates that ad revenue will fall just 2% in 2010. Growth will resume in the second half of 2011, particularly for TV, online media, outdoor and direct mail.
Overall online spending is expected to fall 2.2% this year, but is expected to grow at an compound average growth rate of 8.4% over the next five years, according to the report.
Direct-response-based online advertising, which includes search, lead generation and online yellow pages, will grow 2.9%, while national digital/online media (including rich media, online video, classifieds, email, display and mobile), will decline 11.1%.
About the report: A copy of the July 2009? media advertising forecast (pdf) can be downloaded from Magna’s website.