Olympics and Politics to Raise Ad Revenues for Traditional Media

TV and radio media companies can usually count on a sales boost in years filled with state and local elections. And when those years also include Olympic games, the sales picture is even brighter. Despite the slow economic recovery, 2010 should be no exception for media companies. While  Barclays Capital previously predicted a 0.3% drop in 2010 advertising, including the Olympics and political categories, the revised projection now stands at a 3.5% gain. Excluding the Olympics and political sectors, the industry would only witness a 1.8% rise.

Here are the expected growth rates and declines by sector, according to Barclay analysts:

  • TV 10.1%
  • Internet — local and national 8.9%
  • Outdoor 6.0%
  • Radio 2.2%
  • Magazines (-3.0%)
  • Newspapers (-5.8%)
  • Yellow pages (-4.5%)

Barclays Capital analysts Anthony DiClemente and George Hawkey  say “[w]hile ad-​supported media faces a few longer-​term structural questions given the impact of digital technology on ad pricing, we believe there is a transformative ‘Wal-​mart effect’ taking place in media that structurally favors national advertising, as the impact of scale disparity in corporate America has a gradual structural impact on multinationals’ advertising & marketing strategies.”

Despite the positive news for 2010, the analysts’ statement seem ominous for local media concerns. In the long run, the analysts indicate that local companies will lose to larger competitors when it comes to marketing dollars.

[Source: Forecast sees improvement for all media in 2010, Radio Business Report, 2.15.2010]
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.