2013 To See Local, Network Rev. Decreases

Magna Global on Friday adjusted its 2012 estimates and revised its 2013 forecasts for the U.S. advertising market. Excluding the incremental revenues derived from political and Olympic (P&O) ad spending, core media owners ad revenues grew by 2.7% in 2012, it said.

The various segments of television experienced widely contrasted trends in 2012, according to the report. English-speaking national TV networks advertising revenues decreased 2.6% to $13.1 billion on a normalized basis, but increased 2.2% if factoring in $640 million of non-recurring Olympic ad spend.

National cable television keeps gaining audience share and advertising revenues from broadcast networks, with the category growing by 5.1% to $23.1 billion last year. National cable represents 59% of total national television, compared to 40% in 2001, against 33% for English-speaking national broadcast networks, 3% for Spanish-speaking broadcast networks and 5% for syndication.

Total national television advertising (cable and broadcast, excluding P&O) increased 2.4%. Local TV media owner revenues increased 1.5% (ex-P&O) to $19.8 billion as the media benefited from a healthy automotive market.

Looking Ahead To 2013

Magna Global says the economic prospects for 2013 “continue to point to a slow recovery.” Under these conditions, it says it has reduced its top line 2013 growth forecast — for total normalized media spend (excluding P&O, including direct marketing) — from +1.3% to +1.0%.

 “This assumes that the debt ceiling discussion in February will be successful, and that economic prospects remain on track, so that marketers will feel confident enough to plan some increase of their marketing budgets in the spring.

“Local TV is forecast to grow 1.4% on a normalized basis and drop 9.1% when including (the lack of) political advertising.

It adds: “National television is the category we have revised most significantly, down to +2.1% from +4.8% in October. Since the beginning of the broadcast season in September, the scatter market prices have showed very little “premium” over the upfront CPM inflation despite the fact that primetime ratings have been weaker than expected (-5% for broadcast networks, -2% for cable networks, on adults 18-49, including sports) and broadcasters had to serve extra spots to meet their guaranteed impact. That unusual pattern reveals weak demand.

“As a result, national broadcast revenues (ex P&O) were down by 5.5% in the second half of 2012 and we expect a similar softness throughout the first part of 2013. English-speaking national network TV will be impacted the most from this trend, with revenues decreasing by 6.4% (or -1.8% ex-P&O) in 2013.

“National cable will continue to benefit from better ratings and gain market share from broadcast: revenues will thus grow +4.0%.

“Overall, television media owners ad revenues are now expected to decrease by 3.0% in 2013 (local and national, broadcast and cable, including P&O).