New York—Media research company Pivotal Research Group lowered its U.S. ad forecast to a 0.5% decline in the third quarter, a 1.4% decline in the fourth quarter and zero growth for the full year, citing the effects of massive storm Sandy and other recent variables.
The projections are down from an earlier forecast of 1.2% growth for the third quarter, 0.9% growth for the fourth quarter and 1.4% growth for the full year. The projections do not include political or Olympic ad spending.
“The first signs of a stormy second half of the year for advertising had become clear once the agency holding companies reported, and then Superstorm Sandy arrived, making us certain that 2012 will prove to be a year without growth for the U.S. advertising economy,” wrote Brian Wieser, senior research analyst at Pivotal Research Group, in the report.
Wieser estimated Sandy will cost the advertising industry about $500 million in lost revenue, due to interruptions in local TV and radio programming and also factoring in decision-making by media buyers in the wake of the storm.
Other factors contributing to the downgraded forecast included lower-than-expected industrial production data and personal consumption expenditures, as well as decreased growth among major ad agency holding companies such as Interpublic Group, Publicis Groupe and WPP.