The ad industry’s critical challenge

http://postcards.blogs.fortune.cnn.com/2009/06/22/the-ad-industrys-critical-challenge/

Marcel Fenez, managing partner of PricewaterhouseCoopers’ global entertainment and media practice, laid out the dismal details. He called the current recession in ad spending “not cyclical but structural.”

Which means that the advertising business has permanently changed. And it’s going to be rough sailing for a long while. Global ad spending will decline 12.1% this year, Fenez estimated. Next year will be another bad year — down 2.7% — before an upturn begins in 2011.

That’s the worldwide view, and the U.S. picture looks even worse. Fernez forecast a 14.8% drop in spending this year and 3.3% next year. Hardest hit: TV, newspapers and consumer magazines. Stealing share as the total pie shrinks: Video-game companies and the Internet.