Mediaweek spoke to analysts and industry executives to get a bead on ad revenue for 2010. The outlook for the coming year seems to center on the fact that everyone is bidding a fond farewell to a dismal 2009. Yet as the magazine moves from sector to sector, what it paints is a picture evoking a New Year’s party where the most somber guests might be in the VIP section.
Broadcast TV is one such VIP. The giant of the media sector, made up of the five major networks, saw 20 percent less ad money in its upfront marketplace this year. It’s expected to end up 11 percent down for the year before looking forward to several more down years. Yet its slump reads like a subplot. More and more evidence is mounting that the traditional TV ad model needs to adjust to changing viewing habits. For years we’ve been seeing studies about viewers flocking from TV to games, web and other distractions. In a stroke of irony a device designed to enhance TV watching is taking the latest lead role as a direct threat to the medium. Much noise is being made about a study by TiVo, released last week and picked up by [a]list daily, that found time-shifted DVR viewing accompanied by likely ad-skipping for popular shows. In one figure from the study, three-quarters of people watched NBC’s hit show 30 Rock on DVR last year and two-thirds of them skipped ads. As staggering as that sounds, the average person has to wonder why the other third are sitting through ads. That’s the reality TV executives are facing. Analyst PriceWaterhouseCoopers tells Mediaweek they see TV’s valley getting deeper, with ad revenues slumping until 2013, but they believe the money will flow back as networks get serious about using technology to advance the way they target and engage with their ads.
The outlook says Digital is looking at a promising 2010. How promising varies from component to component, and even analyst to analyst with eMarketer forecasting 9.4 percent growth in online advertising overall while PwC pegs it at only 3 percent. That uncertainty could reflect what Mediaweek calls out as a 2009 replete with revised budgets and late spending. The report predicts very modest growth for display ads, which are still struggling with poor metrics. Search and online video on the other hand are seen as digital darlings, both forecast for healthy growth as the economy continues to recover next year. So is mobile. You can call the market size for mobile ads a frozen rock floating among gas giants, and that s how advertisers looking ahead to their 2010 revenues may see it. Yet the sector is getting one the most bullish forecasts. PwC sees it more than doubling in 2010 to $2.9 billion, driven by more mobile sites able to deliver rich media. Brand marketers should take note. While TV clearly struggles with changing habits and the internet deals with growing pains in measuring ads effectively, mobile s third screen is shaping to be the one with the sweetest growth curve ahead of it.
Mediaweek’s 2010 outlook also looks at cable TV, print, radio and out-of-home. Read the full analysis at Mediaweek.