Peter Kafka

Recent Posts by Peter Kafka

Barclays: Ad Decline Twice as Bad as We Thought

I keep hearing that 2009 ad plans are in stasis until the end of the holiday shopping season, making any prognostication about next year even more of a guess than usual. But the analysts at Barclays figure they’ve got enough data to revise earlier projections they made this fall. You won’t be surprised to hear they’ve become more negative.

Barclays now says U.S. advertising will decrease 10 percent next year, and will rebound to one percent growth in 2010. In October, the bank’s analysts were projecting a five percent drop for 2009. It figures there will still be some Internet ad growth, pegging spending at $28.3 billion. That would be a 6.1 percent increase, and would be mostly driven by search ads. Per usual, that’s good news for Google (GOOG), and lousy news for most everyone else who is trying to build a business based on selling Web display ads.

Like seeing unpleasant forecasts? Read on for a sector-by-sector roll call of gloom:

Broadcast Television Networks: We are lowering our Broadcast Television Network advertising revenue estimates for 2009 and 2010 to down 10.0% and up 3.0%, respectively. Our previous estimate was for down 8.0% in 2009. We expect the national broadcast advertising marketplace will hold up better than local.

TV Stations: We have lowered our broadcast TV local and national spot estimates for 2009 and 2010 and now estimate a decline of 15.5% in 2009 and a decline of 1.1% in 2010. Previously, we were anticipating a decline of 8.9% in 2009.

Cable Networks: We are lowering our estimates for 2009 and 2010 Cable Networks advertising revenue to down 3.0% and up 5.0%, respectively, given the deteriorating consumer economy. Previously, we estimated revenue growth of 1.8% for 2009.

Newspapers: We are cutting our 2009 and 2010 newspaper advertising revenue forecast to down 17.0% and down 7.5%, respectively, vs. our prior 2009 estimate as of one month ago down 14.0% and down 12.0% as of our ad forecast report in October. Specifically, in 2009, we estimate retail down 11.0%, national down 17.6%, and classified down 27.9% (help wanted down 44.7%, auto down 37.5%, and real estate down 28.8%). In 2010, we estimate retail down 5.0%, national down 7.0%, and classified down 13.5% (help wanted down 15.0%, auto down 12.5%, and real estate down 12.5%).

Radio: We estimate radio advertising revenue to decrease 13.0% overall in 2009, below our prior estimate of a 7.4% decline, and now expect down 1.7% in 2010.

Yellow Pages: We have lowered our expectations for 2009 to down 13.0% vs. our prior estimate of down 9.0%, and now expect down 7.0% in 2010.

Outdoor: We are lowering our estimates for 2009 and 2010 Outdoor advertising growth to declines of 6.0% and 4.4%, respectively. Previously, we estimated flat revenue growth in 2009.

Direct Mail: Given mounting cyclical pressures, we are expecting direct mail to decline 8.5% in 2009 (vs. our prior down 6.0% estimate) but increase 2.5% in 2010.

Magazines: We estimate magazine advertising revenue to decrease 15.0% in 2009 (vs. our prior down 12.5% estimate) and decline a further 5.0% in 2010.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik