Downloads:

Ad Industry Declines Mirror 2001 Recession: Goldman Sachs

All sectors of the media business will suffer from the weakened economy in 2008 and 2009, with a slump in local advertising particularly hurting newspapers and local TV, according to a new projection from Goldman Sachs.

Broadcast nets will experience a 5 percent decline in ad revenues (excluding Olympics spending), while ad revenue at local TV stations will fall 7 percent (excluding political spending), writes the Wall Street Journal. Cable will manage to hold nearly steady, declining just 1 percent. Radio, outdoor, magazine and newspaper spending will all slip, anywhere from 5 percent to 10 percent.

Digital spending will not be immune to the financial crunch. Barclays Capital (formerly Lehman Brothers) analyst Doug Anmuth reduced his predictions for online ad spend, forecasting that it will grow 16.9 percent between 2008 and 2012, down from his previous forecast of 23.4 percent. He expects that online will account for 13 percent of total U.S. ad dollars by 2011.

Barclays’ reduced ad outlook includes declines for total U.S. ad spending: total U.S. spend will fall 3.6 percent in 2008, and another 5.5 percent in 2009, analysts say (via The Hollywood Reporter).

ZenithOptimedia’s reduced outlook released Tuesday was slightly more optimistic. Zenith predicts U.S. advertising will grow 1.6 percent in 2008 and just 0.7 percent in 2009, down from its June forecast of 3.4 percent in 2008 and 2.6 percent in 2009.

Should the Barclay’s outlook prove true, it would be worse than the losses suffered in the 1991 and 2001 recessions. Zenith’s outlook is less dire because there is “no bubble to burst, which is why we expect global ad expenditure to slow in 2008 and 2009 rather than to go into reverse.”

Goldman Sachs says the decline in ad spending could mirror the 2001 recession.