Magna: Global Online Ad Spend Will Overtake Newspapers By 2013

Although the newspaper industry in the U.S. has been able to arrest its severe advertising decline of the past three years, Magna Global predicts that worldwide, online ad spending will overtake newspapers in a little over two years. Meanwhile, in the overall ad forecast looking to 2011, the U.S. ad market is looking fairly weak — though positive, at least — while online is expected to rise 11.6 percent in the U.S., slightly lower than the 12.2 percent for Magna Global’s head forecaster Brian Wieser previously called for.

Online is also looking less robust next year in the UK as well. Magna expects a 7.7 percent total rise there in internet ad spend in 2011, versus this year’s expected 11 percent gain.

The numbers highlight how precarious the ad recovery has been — and how much progress was made this year over last. In all, worldwide ad expenditures will rise 5.4 percent next year, mostly thanks to the continuing growth in emerging markets and stabilization in the west.

Other highlights from the Magna report include:

— Video, TV advertising, that is, will continue to reign over all media, though online is growing even faster. TV will command a 40 percent share of all ad dollars and gain 7.5 percent annually through 2016.

— Online advertising will overtake newspapers as the second largest ad spending category by 2013 by taking in $117 billion at that point.

— Drilling down further within internet ad spending, online video will capture $4.7 billion in global ad revenues, and should rise by 19.6 percent each year through 2016. By that point, online video will account for $11.4 billion in global ad spend.

— Mobile advertising is smaller, at $2.7 billion, and will grow at a similar pace to online video. Within five years, web publishers should see about $6.6 billion from mobile advertising.

— There are some good news for newspapers: the medium will grow modestly — roughly 1.7 percent over the next five years. So it may be slipping, but certainly not dead yet.

— How does Magna’s projections for online ad spending in the U.S. compare with some of the forecasts that have come in over the past few months? As we gathered our notes two months ago, the latest numbers are a bit lower than Magna’s previous 12.1 percent expectation, while still more optimistic than eMarketer’s 10.8 percent anticipated rise, but less so than ZenithOptimedia’s 13.8 percent call. Still, many of those figures are expected to be revised as well, so stay tuned.