Slow growth but light at the end of the tunnel for TV advertising

The latest Magna Global US Advertising Forecast is predicting that core media owners’ advertising revenues are expected to grow through 2013, but only by a modest 0.4%.

What makes this growth more impressive, and offers grounds for optimism for forward-looking trends, is that after what was a weak first quarter, the advertising market is on the rebound and is accelerating gradually but drilling down, and while digital media will likely be the only category to grow significantly this year, TV is expected to recover in 2014.

Magna Global says that even though consumers and businesses will remain cautious in the short term, fiscal austerity has not broken the recovery. This will translate into top-line growth of +2.4% ex-P&O for core media advertising (TV, radio, Internet, out-of-home, magazines and newspapers) while traditional direct media (directories and direct mail) will continue to under perform.

Looking at TV in particular, advertising was slow in the first quarter of 2013, with cost-per-thousands (CPM) on the scatter market showing almost no premium over the 2012/2013 upfront cost increases. Pricing was found to be up in the second quarter, but Magna believes this is mostly the result of low supply due to poor ratings, rather than a general surge in demand. It anticipates national television advertising to grow modestly, while local TV will be down and television ad revenues as a whole will decrease by -2.8% (+1.9% ex-P&O).