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2011 Ad Spend Forecast Slashed by Media Heavyweight

21 Jul 2011

Media analyst Steve Allen has significantly downgraded his ad spend forecast for the remainder of the year, dropping it by five points to just 2.42 per cent, with newspaper and magazines expected to be the hardest hit.

Allen, managing director at Fusion Strategy, was initially predicting spend to grow by 7.74 per cent this year but weak retail sales, increase consumer saving and low levels of consumer confidence has led to the downgrade, as reported in B&T.

The reduction is consistent with forecasts from some media agencies all of which have cut their initial growth predictions for 2011; although Fusion's 2.42 per cent growth forecast is lower than most of them.

Allen has revised magazine ad spend down by 10.55 per cent to negative 4.64 per cent or $1.13bn, with newspapers down 10.05 per cent to negative 5.12 per cent ($3.02bn).

Online ad spend is still expected to increase by 11.9 per cent but that figured has been reduced by 4.77 per cent ($2.68bn), while outdoor will see growth of 5.78 per cent, a fall of 4.16 per cent ($505m). TV spend will rise by 3.58 per cent, a fall on Fusion's initial prediction by 2.38 per cent to $3.7bn. Radio will increase by 3.55 per cent this year to $1.05bn while pay TV will rise by 8.18 per cent to $410m.

"We see an extended period of depressed trading conditions. We see no catalyst for a break in this cycle," Fusion told B&T.

It said a "tenuous" ad spend prediction for 2012 was growth of 3.25 per cent rising to 4.2 per cent in 2013.

Source: B&T

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