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Political advertising to rescue 2012 US ad market

Political advertising and the London 2012 Olympics will generate 3.7% year-on-year revenue growth this year, according to MagnaGlobal’s US Media Owners Advertising Revenue Forecast.

Magna Global estimates that in 2011 core media revenues (excluding direct marketing) grew by 2.9% to $147.4bn. But despite the combined growth of the last two years, the US advertising market is still 13% smaller than what it was in 2007 ($168.7bn).

For 2012, without the advertising revenues generated by this year’s US elections and London 2012 Olympics, core media ad revenues would grow 2.0% to $149.8bn, a slowdown compared to 4.5% like-for-like growth in 2011.

However with the impact from this year’s quadrennial events, which are set to add an extra 1.7% growth, ad revenues for 2012 will reach $152.9bn, a 3.7% year-on-year growth over 2011.

Political spending is expected to reach a record-high, with $2.5bn generated from TV. The Olympics are estimated to generate $630m, bringing the total to a record $3.1bn for TV alone.

Broadcast TV will benefit the most, expected to grow by 8.5%, with total television to grow 6.8% to $62.4bn. Internet media revenue is expected to experience 10.9% growth, driven by paid search (+12.6%), online video (+22.4%) and mobile (+44.2%).

Outdoor is the only other media category expected to grow (+4.0%), while newspapers (-6.0%), magazines (-5.2%) and radio (-0.8%) are expected to struggle in 2012.

US media owners ad revenues (yoy growth 2011-2012)

Jenni Baker, London