Fitch Ad Forecast: Online Revs Look Stable; But Some Cities Could Be Without Daily Papers By 2010


The current ad recession could extend past 2009 and closely resemble the period during the 2001 downturn, when revenues were down 6 to 9 percent in real terms, according to credit rater Fitch’s latest media forecast (free registration req.) However, there is one big difference between then and now that might mask the pain somewhat. Seven years ago, when advertising revs plunged, the industry was coming off three years of annual gains ranging from 8 to 11 percent, mostly driven by the dot-com bubble. Since coming back from the dark days of ’01, the industry’s growth has been fairly restrained.

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Online to keep its head above water: Despite the overall gloom, Fitch’s outlook for online revenues are stable, expecting single digit increases. That revenue growth picture is in line with other forecasters like eMarketer, which nearly halved its growth rate estimate for 2009 to 8.9 percent from its 14.5 percent increase, which the researcher called back in August. In general, CPM growth will cool, though individual segments like online video and social nets are likely to continue growing. Over the long term, Fitch anticipates online ad growth to rebound from economic weakness and continue to capture share from traditional outlets.

Newspaper extinction in some cities?: It’s hard to come up with a new way to express how bad newspapers have got it, but Fitch believes another possible bomb that could drop: in addition to predicting newspapers will see more defaults, be shut down and liquidated next year, several cities could go without a daily print newspaper by 2010. Overall, newspaper industry revenue growth will be negative for the foreseeable future, the credit rater says.

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