MAGNAGLOBAL’s New Spain Forecast: Growth in TV and Online, But Weakness for Other Media
Madrid, June 28, 2010 – MAGNAGLOBAL, a division of IPG’s Mediabrands, is releasing an updated, detailed outlook on the Spanish advertising economy today. A summary of our nine page report is contained below.
Spanish media is likely to undergo significant change as a result of economic and secular shifts which may prove symptomatic of other European media economies. The continent’s outlook for the next couple of years has generally worsened since late last year, as many governments in the region – Spain among them — now appear likely to undertake difficult measures to rebalance their economies.
After declining 11.1% in 2008 and falling a further 20.9% in 2009, Spanish media supplier advertising revenues are expected to only grow 1.3% over the next five years. On a nearer-term basis, while 2010 will see a bounce back from 2009 lows, the second half of the year will be difficult for the media economy. Consumer sentiment remains strongly negative, and negative consumer sentiment, higher taxes and government budget cuts may feed on themselves in 2011 to bring another year of negative growth.
Despite these overall trends, large advertisers will continue to view television as disproportionately important given the limitations of reaching mass audiences of consumers through other media. Under such circumstances, major broadcasters’ advertising revenues have significantly outperformed market expectations and have led us to revise our 2010 estimates higher: we are now forecasting 4.0% TV advertising growth in 2010 vs. -5.0% previously. Further, consolidation in the industry with Tele5’s purchase of Cuatro effectively leaves two dominant sales houses along with A3, now that state-owned public broadcaster RTVE was ordered to remove all advertising on January 1, 2010. Commercial broadcasters have benefited significantly from the new removal, as advertising dollars remained in the medium.
We remain positive on Online and raise our 2010 estimates to +12.7% from +7.3% previously. Online remains an underdeveloped advertising medium in Spain, relative to peer countries around Europe. As a platform it is hampered by a) low levels of internet access among the population-at-large, b) relatively high use of social media (and thus low use of portals and branded content), c) low levels of e-commerce use, d) alternative media choices at the local level and e) low levels of internet marketing from small and mid-sized enterprises.
The internet has taken audiences away mainly from news and gossip print titles, and increasingly advertisers are viewing print as an auxiliary medium rather than a primary one. Consequently, we see newspapers declining 1.6% over the next five years and magazines falling by an average of 2.6%. Commercial radio will be partially sustained by high listenership levels – posting growth of 1.7% in 2010 – but like many other media platforms will be challenged to stand its ground (and market size) in years ahead. Outdoor advertising should similarly see growth in 2010, but the sector will display its weakness with a modest compounded annual decline through 2015.
Please contact MAGNAGLOBAL for details on accessing our full length update on Spain, as well as details for accessing our complete data sets for advertising markets in Spain and around the world.
