In view of improved expectations of economic recovery, the US advertising market is forecast to fall just 0.1% this year, according to a revised forecast from MAGNA. The reassessment is a slight improvement from MAGNA's forecast issued in December 2009, which projected a 1.3% decline in ad spending.

US advertising revenue is forecast to reach $161 billion in 2010. When incremental revenues from local political and Winter Olympics ads are factored in, spending is projected to reach a total $164.3 billion during the year; political ads will account for $2.74 billion and Winter Olympics ads for $487.5 million.

Below, additional projections issued by Magna.

First Quarter Ad Forecast: Down 3%

The first quarter of 2010 is forecast to be the last quarter of decline for the US ad market during this recession: US media suppliers will collectively generate 3% less advertising revenue on a normalized basis than they did a year ago, even accounting for the very weak economy experienced in early 2009. Industry revenues will drop to $36.8 billion during the quarter, from $38.0 billion in the first quarter of 2009.

These figures reflect a moderating pace of decline compared with the estimated revenue reductions of 7% during the fourth quarter of 2009, and a 15% decline during the third quarter.

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Ad Categories: Online Still Strong

Despite flat or negative growth in some categories, digital advertising and TV are forecast to grow in 2010 from 2009 levels:

• Direct online ad spending, which includes paid search, lead generation and Internet yellow pages, is forecast to reach $15.6 billion, up 12.2%.
• National online ad spending, which includes rich/online video, Internet classifieds, email, digital display, and mobile ads, will reach $5.8 billion, up 4%.
• Local online spending will reach $3.5 billion, 3.7%.
• National TV will reach $35.3 billion, up 6.2% from $33.3 billion last year.

Meanwhile, most traditional advertising categories are forecast to fall in 2010:

• Local Newspaper spending, which excludes Internet-based ad revenue, will fall 10.7% to $21.8 billion.
• Magazine spending will drop 7.3% to $14.3 billion.
• National Newspaper spending will drop 11.2% to $775.7 million.

Longer-term forecasts have also been modestly increased to reflect the higher confidence in economic recovery: Total normalized media supplier advertising revenues are forecast to rise at a compound annual growth rate (CAGR) of 2.3% between 2010 and 2015.

About the data: Revised forecasts are provided by MAGNA, a division of IPG's Mediabrands.