Analysts Predict 3.5% Rise in U.S. 2010 Ad Market

While industry experts have been predicting a general recovery in the U.S. ad market this year, Anthony J. DiClemente, a New York-based analyst with Barclays, gets specific. In his latest forecast, DiClemente is looking for an overall 3.5% rise in this sector.  DiClemente links sporting events such as the Olympics and the World Cup to a projected 7.8% rise in the national TV market.

DiClemente is also expecting an 8.9% rise in online marketing. This prediction can be justified by considering the still positive growth rate in the online sector and the general economic recovery.

The most exciting piece of good news for media companies, though, comes via the latest ruling by the U.S. Supreme Court.  Since 2002, when the McCain-Feingold campaign finance reform law went into effect, corporations, unions and nonprofit groups have been limited in the timing of their ad placements. Specifically, these entities had been barred from advertising 30 days before primary elections and 60 days before general elections.  Late last month, the Supreme Court lifted the restrictions on advertising by ruling that the law discriminated unfairly against select groups.

COO Evan Tracey at TNS/CMAG expects an additional $500 million could enter the ad market in the 2010 elections as a result of the ruling.  Local media companies, especially those with TV and radio offerings, should garner about half of the total election spending of $2.8 billion while the rest will go to national broadcasters. States with hotly contested gubernatorial campaigns will include California, New York, Texas and Ohio.

Despite this good news for the media industry, not all segments will enjoy growth rates. DiClemente is expecting declines in newspapers (5.8%) and magazines (3%). These figures are better than previously predicted but underscore the transitory times in which media companies operate.

[Sources: Rabil, Sarah. U.S. Advertising to Rise 3.5% in 2010, Barclays Says, Bloomberg​.com, 1.28.10; Gough, Paul. Supreme Court Ruling, Reuters​.com, 1.21.10]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.