Magna Cuts Advertising Outlook 8.5%

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IPG Mediabrands’ Magna unit has revised its 2020 advertising outlook for the US.

In December last year, Magna predicted the market to grow 5.7 per cent in 2020. This has now been revised to a 2.8 per cent decline – marking a 8.5 per cent downturn.

“This new market scenario is based on Magna’s statistical model fuelled by 40 years of data, and by the latest forecasts from macro-economists, who anticipate real GDP shrinking by -1 per cent to -4 per cent this year, compared to a forecast of +2 per cent pre-coronavirus. 6,” Magna says in its revised report.

“At this stage, the total market decline anticipated (-3 per cent or -$6.2 billion vs. 2019) remains less severe than the decline experienced in 2008-2009 (-20 per cent or -$33 billion vs 2007), mostly because of the weight and resilience of digital advertising today.

“However, at this stage, both the macro-economic outlook and the corresponding advertising forecast present a high degree of uncertainty and significant downside risk for 2020.”

Linear ad sales is expected to be hit the hardest, led by the postponement of major events such as the Olympics.
There are some positives in Magna’s revised outlook.
What was originally set to be a slow 2021 will now be bolstered by the rescheduled Tokyo 2020 Games, causing Magna to adjust next year’s outlook from 1.4 per cent growth to a stronger 2.5 per cent.

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