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U.S. Advertising Economy to Drop 14.5 Percent

15 Jul, 2009 Response This Week

NEW YORK – Brain Wieser, the new global director of forecasting for Interpublic Group of Cos.’ Magna, gave his first forecast this week, stating that the U.S. advertising economy will fall 14.5 percent this year, reports Revenue at media suppliers will drop from $189 billion to $161 billion and is not expected to start bouncing back until the second half of 2010.

Although Wieser said the worst may be over, he believes the first half of 2009 will go on record as the lowest advertising period of this recession. Magna estimates that media supplier ad revenues will fall by 18 percent, compared with the same period last year. The decline through 2010 will be at moderate levels, and market growth will surface in the second half of 2011.

In 2010, media supplier ad revenue will decline 2 percent and the total will only increase by a compounded annual growth of 1 percent between 2009 and 2014.

The forecast is the first since Magna’s new forecasting model, which is no longer calculated on advertising expenditures but instead on the advertising revenue generated by the media suppliers. Magna also now groups media into direct, national and local media types. The forecast was the first since Wieser took over for longtime forecaster Robert Coen.

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