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Media has had pneumonia, now get ready for a year of flu warns analyst

Media analyst Steve Allen has forecast a tough 2013 advertising market, and despite an overall prediction of 3.4% growth says the market “may not have pneumonia, but it still has severe flu”.

The head of Fusion Strategy has published his predictions in a report titled “Oh dear, things just won’t get better. And most likely, not for a long time.”

He predicted that the relatively downbeat outlook would remain for two to three years – with newspapers suffering the most as circulation dwindles.

 

 

The 2013 Fusion Strategy outlook table for ad spend predicts for 2013:

  • Newspapers: down 4% to $2.45bn
  • TV: up 2.5% $3.89bn
  • Radio: up 2% to $1bn
  • Magazines: up 3% to $975m
  • Outdoor: up 3% t0 $520m
  • Cinema: up 12.2% to $110m
  • Pay TV: up 4.6% to $455m
  • Internet: up 10.1% to $3.7bn

The overall average is 3.4% growth to $13.2bn.

“But this is coming off a low base and follows two years of dastardly figures,” Allen said.

Allen said the large internet figure included search engine revenue, and while Google never releases figures, the Internet Advertising Bureau had published an estimate which was used to compile the Fusion Strategy’s figures.

The other seemingly aggresive growth prediction was cinema although growth predictions coem with a note of caution after Val Morgan CEO Damian Keogh last month reportedly  admitting the methodology used by the industry had inflated the figures.

“Unfortunately until a new calculation system is worked out and there is more clarity, we can only go with the figures we’ve got,” Allen admitted.

He said various international factors were affecting the Australian economy and retail mood, but also said Coles and Woolworths played a big part in the drop in media spending.

“Over the past 30 years there has been an average 6% growth in retail spending every year, but last year it only tracked at 3.65%,” he said.

“Coles and Woolies have been embarking on price cutting campaigns, and that in turn puts pressures on manufacturers to cut costs and one of the first places they cut is marketing.”

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