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After Political Windfall, TV Spending to Fall in 2013: Magna

2012 Election Cycle, Summer Olympics Boost Spending by 9% 10/11/2012 12:30 PM Eastern
After taking in record levels of political spending in 2012, the TV industry's advertising revenues are expected to drop in 2013, according to the latest forecast from media agency Magna Global.

Magna says that the "hangover" that usually accompanies the year following an election/Olympic year will be stronger than usual for television, with revenue down 1.4% to $63 billion, Magna says. In the last non-political year, 2011, revenue grew a modest 1.3%.

But the elections and Olympics will make TV a winner in 2012, with revenues up 9%. Magna estimates that the 2012 election cycle will generate more than $2.7 billion of political advertising, up 30.4% from $2.1 billion in2010.

Much of the political spending is on local TV, especially in the battleground states.

"Without political ad spend, Magna believes that local television ad revenues would have been up 2% this year; with political effect, it will grow by an average 14%. The bonanza will be much bigger in Swing States," said Vincent Letang, executive vice president, and director of global forecasting. "Despite the rise of digital media, local TV remains essential in political marketing because only a ‘lean-back' medium can effectively reach the low-interest, undecided voters who, by definition, are less likely to seek information from "lean-forward" digital media or engage with digital campaigns. And of course local TV can surgically target swing States or counties."

Magna says television also benefited from its exposure to some well-oriented categories (automotive, restaurants, finance) in the first part of the year.

For 2013 Magna forecasts that total core media revenue will be up 0.8% to $154.4 billion in 2013, driven by an 11.7% increase in digital media, including online video and mobile advertising. In July, Magna's forecast called for a 0.9% increase in 2013. For 2012, it sees core media showing a 4.6% gain.

September