Anthony DiClemente had been one of the most bullish forecasters of 2010 ad spending in the US, but the Barclays Capital analyst has now eased back a bit on the throttle. In his latest revision he’s reduced his overall projection of the 2010 advertising marketplace. However, he’s slightly increased his projections for TV, while cutting back on radio and some other media.
“We are modestly lowering our 2010E [estimated] US advertising estimate to +5.0% year-over-year (versus +5.5% previously and -15.5% last year). We are lowering full year 2010 expectations for most traditional media categories (including radio, magazines, newspapers, and yellow pages) and raising estimates for TV and internet. Additionally, we now provide quarterly actuals and detailed estimates for both 2010 and 2011, as our prior model had provided only annual estimates for both years,” DiClemente said in an update Thursday.
He cited three reasons:
1) Macroeconomic data has surprised to the downside in the past few weeks and as a result, we believe the consensus view now incorporates some degree of economic slowdown.
2) The strengthening automotive sector bodes well for U.S. advertising, as auto represents one of the largest categories of total US advertising. Automotive advertising was up +22% Y/Y in 1Q ’10.
3) Given the Supreme Court essentially lifted restrictions on corporate spending on federal candidate elections in January 2010, we believe the pool of potential political advertisers is likely larger than ever before. While there is a lack of visibility here, we believe risk remains to the upside.
| Barclays Capital Advertising Forecast for 2010 | ||
| Medium | Previous | 7/29 Update |
| National network TV (incl. Olympics) | 9.8% | 10.5% |
| National cable networks | 6.5% | 7.5% |
| Local broadcast TV (incl. political) | 23.3% | 24.5% |
| Internet (local & national) | 8.9% | 11.8% |
| Outdoor | 6.0% | 5.0% |
| Radio | 7.4% | 6.8% |
| Magazines | 2.0% | 1.0% |
| Newspapers | -3.3% | -6.0% |
| Yellow Pages | -8.0% | -13.0% |
| Total US Advertising (incl. Olympics & political) | 5.5% | 5.0% |
| Total US Advertising (ex. Olympics & political) | 3.7% | 3.5% |
| Source: Barclays Capital |
RBR-TVBR observation: This is a moving target, with economic signals changing and legislative/court actions affecting political spending. The good news is that advertising is still going in the right direction…that is, unless you are in the newspaper or yellow pages business.
