U.S. Ad Economy Likely Won’t Shrink in 2010: Magna

Just a few months after predicting that U.S. ad revenues would decline by 1.3% in 2010, Interpublic’s Magna unit has revised its projections, now saying advertising revenues will be essentially flat this year, down just 0.1% from 2009.

Magna says now that advertising revenue will be $161 billion, excluding the effects of the Olympics and local elections, MediaPost writes. Including Olympics and election spending, the U.S. advertising economy will rise 1.4%.

U.S. advertising fell 15.5% in 2009, Magna estimates.

Magna predicts that online will have a relatively strong year. In 2010:

• Direct online ad spending will jump 12.2%
• National online ad spending will grow 4.0%
• Local online spending will grow 3.7%

Additionally, national TV is expected to rise, up 6.2%. The Olympics are expected to add $487.5 million to the U.S. ad economy; election spending will add $2.743 billion.

Direct mail is expected to be up 4.1%. Print, however, will have another challenging year: newspapers will drop 10.7%, while magazines will slip an additional 7.3% (via Mediaweek). Those drops, however, are less significant than the plunges of 27.2% and 19.6% for newspapers and magazines respectively in 2009.

The first quarter of 2010 will be the final quarter of decline, Magna predicts (via Broadcasting & Cable).

Magna also upgraded its longer-term forecasts, predicting that ad dollars will grow by a compounded annual growth rate of 2.3% between 2010 and 2015, up slightly from the 2.1% predicted in December.