VSS 2009 report

IN 2009, communications spending is likely to show a 1 percent decline for the year, the first notable decline in at least four decades. In five years, advertising spending in magazines will finally have rebounded after five years of decline — but at $9.8 billion, it will still be nowhere near the $12.9 billion it was in 2008. And by 2013, the video game market will be almost the size of the shrinking newspaper industry.

Advertising, as is clear by now, is contracting. Spending dropped 2.9 percent in 2008, to $210 billion. For 2009, Veronis Suhler expects advertising to end up declining 7.6 percent, with a 1 percent decline to follow in 2010. Advertising will again grow in 2011, the firm projects.
The segments where advertising will decline most rapidly in 2009, according to the firm’s estimates, are newspapers (down 18.7 percent, to $35.5 billion); consumer magazines (down 14.8 percent, to $11 billion); radio (down 11.7 percent, to $15.8 billion); and broadcast television (down 10.1 percent, to $43.0 billion). Veronis Suhler expects a few sectors to increase their advertising dollars this year, including mobile (up 18.1 percent, to $1.3 billion) and the Internet (up 9.2 percent, to $23.8 billion).

Still, advertising is a decreasingly important part of the communications sector, compared with the other overall categories Veronis Suhler looks at — marketing services, consumer and products and information sold to businesses.

“What’s really stark is that advertising, which not so long ago was the biggest part of the overall pie, is now the smallest part of the pie and is shrinking at a pretty good clip,” said James P. Rutherfurd, executive vice president and managing director of the firm.

In the report, Veronis Suhler breaks down the expected performance of the elements of each area of marketing and communications. Some of the fastest-growing ones are creative strategies that have lately gained favor among marketers. They include paid product placement, with a compound annual growth rate from 2008 to 2013 of 17.6 percent; e-mail marketing and in-game advertisements (both 18.5 percent); mobile advertising outside of texting (33 percent); paid interactive television gaming (38.7 percent); mobile advertising and content tied to broadcast television (35.5 percent); mobile gaming and advertising (46.2 percent); and Internet and mobile home video downloads (34.4 percent).

http://www.nytimes.com/2009/08/04/business/media/04adco.html?_r=1