Ad revenue forecaster raises outlook for 2010

PHILADELPHIA – A company that tracks advertising trends raised its outlook for the year Tuesday and said the two-year slump in U.S. ad revenue may be ending.

Magna, a unit of the Interpublic Group of Cos. Inc., expects 2010 ad revenue of $161 billion, about the same as last year if political and Olympics ads are excluded.

Previously, Magna had forecast a decline of 1.3 percent. The last time ad revenue increased was in 2007. The recession took hold in December of that year as ad revenue hit $204 billion.

Revenue fell 7.5 percent in 2008 and 14.6 percent in 2009.

Brian Wieser, Magna’s global director of forecasting, said he raised his ad outlook based on improving expectations for industrial production and consumer spending. He said the two economic indicators show the highest correlation with advertising trends.

Online ad revenue is expected to increase by 9 percent to $24.9 billion this year. Last year, online ad revenue is estimated to have fallen 3 percent to $22.8 billion.

Magna said national newspapers should see an ad revenue decline of 11.2 percent to $775.7 million after dropping 26 percent in 2009. Ad revenue at local newspapers will be 10.7 percent lower this year at $21.8 billion after falling 27.2 percent last year, Magna said. The figures exclude online ad revenue.

National TV ad revenue is forecast to grow 6.2 percent to $35.3 billion for 2010. That compares with a decline of 3.6 percent last year.

But local TV ad revenue is expected to fall by 1 percent to $14.3 billion this year on top of an estimated 20 percent drop in 2009. TV revenues exclude political and Olympics ads.