Advertising Trends Looks Favorable in 2010, according to Magna

Magna released its U.S. advertising forecasts for 2010 through 2015. In it the research firm forecasts U.S. advertising, ex-political, to remain flat in 2010 and then grow by nearly 2% in 2011. This follows a 14.6% advertising decline in 2009.

See my previous write-up on stocks to buy in a cyclical advertising recovery.

Not surprisingly, paid search is projected to grow the fastest in 2010, with 13% yea-over-year growth. This is good news for Google and Microsoft and would be good news for Yahoo! if they no longer lose market share. Then again I suppose that losing share in a growing market my not be that dreadful financially. Online display advertising is expected to grow 10.6% in 2010, which is good news for Yahoo, as the leader in the space, and good news for the newspapers pursing an online only strategy. [I must say I was surprised to see that the New York Times generates $100 million a year in online display ads, as reported by the Wall Street Journal.] This also offers a glimmer of hope for AOL as it works through its transition.

What is surprising is that radio advertising is only expected to decline 2.5% in 2010 following a 21% decline in 2009. I wrote previously that radio has probably seen trough levels and that the worse of the secular decline is behind them.

Newspapers is expected to continue to fare worse than other mediums with advertising spend declines of 10.7% on the back of a 27.2% decline in 2009, the worse of any of the ad mediums.

Local TV advertising, including local cable, is expected to decline 1% in 2010 following a 20.2% decline in 2009.

Outdoor advertising is expected to remain flat in 2010 following a 14.8% decline in 2009

National TV, which includes cable, broadcast, and syndication, is expected to increase 6.2% in 2009, driven mostly by cable, which is expected to grow 9.1%. The medium experiences declines of 3.6% in 2009.