NEW YORK (AdAge.com) -- Despite all the talk about upticks and turnaround in the U.S. advertising market, don't hold your breath for a rebound in the first quarter of this year, a new forecast is warning. If you can hold your breath until the second quarter, on the other hand, you might be in luck.
Revenue for U.S. media suppliers will total $36.8 billion for the first quarter of 2010, according to Magna, the Interpublic Group of Cos. forecasting unit. That's down 3% from $38 billion for the same time last year -- a time that already felt pretty awful.
But that should get the media business to its turning point. Citing the year-over-year growth in industrial production that's projected for the second quarter, Magna's global director of forecasting, Brian Wieser, predicted that the first quarter will deliver the final ad spending decline of the downturn.
The year as a whole will see U.S. ad revenue come in essentially flat -- down 0.1% -- Mr. Wieser predicted, raising his forecast from an earlier prediction of a 1.3% decline. U.S. media will generate roughly $161 billion of ad revenue in 2010, excluding local TV revenue from political campaigns and national TV revenue from the Olympics, according to the new projection.
Politics up, Olympics down
Political advertising this year will generate 15% more in ad revenue for local TV suppliers, both broadcasters and local cable, than it did in 2008 or 2006, with nearly $2.7 billion this year compared to the $2.4 billion in revenue it generated in the last two election years. That increase will come despite all the presidential campaign spending in 2008, Mr. Wieser said, because there are more races in presidential off-years and there is more money constantly coming into the system.
Olympic spending this year, however, will not generate as much incremental revenue as it did during the 2006 Olympics. The approaching Winter Games will generate $488 million in incremental revenue this year, according to Magna, compared to $650 million in incremental revenue during the 2006 Olympics. NBC recently said it will lose money on the Olympics this year for the first time in memory.