paidContent.org - Barclays Reduces '09 Online Ad Forecast To 6 Percent Growth; Total Ad Spend To Fall 10 Percent

David Kaplan
paidContent.org
Thursday, December 18, 2008; 7:07 PM

Another day, another ad spend downgrade? Online advertising will grow a paltry 6.1 percent to $25.1 billion next year, says Barclays Capital internet analyst Doug Anmuth, in his latest significant downward revision. It was only October when he predicted that web ad dollars would grow 16.9 percent. That was revised down from May's expectation of 23.4 percent. But as a commenter said on an earlier ad spend outlook, some growth is better than none. Putting things into perspective, the U.S. total ad spending looks to plummet 10 percent to $252.1 billion, Anmuth now says, altering his previous -5.5 percent projection.

Separately, Nielsen released preliminary figures for the first three quarters of 2008 and found that online display ads fell 5.6 percent on an ad decline of 0.6 percent for the period. (Nielsen's release is here)

Looking to the close of 2008, this year's online ad spend is expected to rise 11.4 percent to $23.6 billion, Anmuth estimates. Earlier this fall, Anmuth had anticipated '08's online take to rise 16.9 percent to $24.79 billion. Back in May, Anmuth predicted online revenue gain of 23.4 percent. As for the good news, that will have to wait until 2010, when Anmuth says internet ads should reaccelerate to 12 percent, reaching $28.1 billion. Anmuth's '09 forecast is in line with some other prognosticators' views from this month

Much more after the jump...

?Magna Global's Bob Coen has downgraded his '09 forecast for U.S. online ad spend to 8 percent growth from his earlier call this summer for web ad dollars to rise 12 percent.

?WPP's GroupM expects 5 percent online ad growth in '09, way down from GroupM's expectation for 16 percent gains this year. Worldwide, internet ad growth is predicted to slow from 22 percent in 2008 to 10 percent in '09.

?ZenithOptimedia, sticking to the bullish end of the spectrum, is forecasting online ad growth of 18 percent?both for worldwide and North America?next year. As for this year, 21.2 percent online ad spending growth.

?eMarketer, in its revised forecast at the end of November, dramatically lowered its 2009 online ad spending projections to only 8.9 percent growth, compared to the 14.5 percent gains it estimated in August. eMarketer anticipates online ads to rise 11.3 percent to $23.6 billion for '08.

?Getting back to Anmuth's online outlook, the Barclays analyst is seeing anemic 4 percent growth in display, while search still remains surprisingly strong with 20 percent gains. That is rounded out by further weakness in the "Auctions and Other" category, which is slated to drop 2 percent. Lead gen and e-mail marketing is tracking the overall internet space and should be up only 5 percent.

?As for his rosier 2010 forecast, Anmuth is calling for a comeback for display (12 percent growth), a slowdown in search (up 15 percent), a rebound in "auctions and other" (5 percent gains) , and a slight uptick for lead generation and e-mail (climbing 6 percent).

Turning to traditional media, the signs are expectedly dark:

?Newspapers: Barclays is cutting its '09 and 2010 newspaper ad revenue forecast to -17 percent and -7.5 percent, respectively, vs. the investment back's prior '09 estimate as of one month ago, when it said newspapers would be down 14 percent and down 12 percent . Specifically, in '09, newspapers will likely see retail ads fall 11 percent, national down 17.6 percent, and classified down 27.9 percent. Within the classifieds category, next year help wanteds will crater 44.7 percent, auto ads will plunge 37.5 percent, and real estate drop 28.8 percent. In 2010, things are not expected to feel much better for newspapers: retail (-5 percent), national (-7 percent), and classified (-13.5 percent, with help wanteds sinking 15 percent, auto ads sliding 12.5 percent, and real estate dropping 12.5 percent).


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