Magna: Cable, Digital Are Big Winners; Direct Response Remains Weak

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Cable TV and online media will continue to outpace traditional media in the U.S. this year, as the ad recovery has produced a “return to normalcy,” says the latest forecast from Interpublic Group’s Magna Global. Still, as rival ZenithOptimedia revised its 2011 forecast down slightly, Magna is expecting moderate growth across the globe this year, as the crises in Japan and upheaval in the Middle East have produced greater uncertainty among marketers.

Cable TV: Overall, U.S. media spending is expected to grow a moderate 3.1 percent in 2011. Broadcast has been doing fine since ad spending recovered, but the big news is that national cable networks were one of the main beneficiaries of the 2010 comeback, growing 12.4 percent and outpacing nearly every local category, including local online media. This year, as the audience continues to shift to pay TV, ad dollars will follow right along, rising 10.8 percent and outpace broadcast, which Magna says will rise only 2.4 percent.

Online: Online had a great resurgence last year and this year, Magna expects an 18.7 percent gain. The advances are driven by growth in display, as well as online video and mobile.

However, there is some weakness on the web side. Paid Search will remain strong, but in general, direct response ad spending which is mainly relied upon by small and medium-sized businesses, will struggle. The segment, which includes internet yellow pages, paid search, lead generation, directories, and direct mail will be slightly better than flat with an 0.8 percent increase in 2011.

The direct online segment will underperform traditional mass media for a second consecutive year. But that’s mainly because small businesses are still reeling from the weak economy. Once things stabilize a bit more, small and local marketers will likely drive direct higher and allow it to once again surpass mass media.

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