Lanzano predicts drop in US ad revenue

NEW YORK - Ad revenue in the US will drop between five to eight per cent in 2009, according to Steve Lanzano, chief operating officer of MPG North America.

Steve Lanzano...MPG North America chief operating officer
Steve Lanzano...MPG North America chief operating officer

Lanzano said that although every category of media would next year suffer from shrinking corporate marketing budgets, cable networks and web search would probably hold up better than other areas.

He made his comments yesterday during the Reuters Media Summit in New York.

Lanzano said: "I think the real key for next year is going to be the second and third quarter.

"I think if the economy continues to go south, you're going to see some real hits across all media in the second and third quarter of next year."

Lanzano said that ads in sports programming would suffer because 9 to 10 per cent of spending on broadcast sports comes from financial services and automotive.

"Because of the hits in the categories that support sports, whether it's financial or automotive or retail, I think they might take a little more of a hit than they would in other recessionary periods," he said.

Industry researcher eMarketer on Monday cut its forecast of 2008 U.S. online ad spending to $23.6 billion from its August projection of $24.9 billion.

That is still an 11.3 per cent rise from 2007, demonstrating that online ad revenue continues to grow even as newspapers, radio and broadcast television see declines.

But speaking yesterday at the summit, My Space founder Chris De Wolfe said that internet company valuations were under pressure, providing opportunities to acquire start-ups.

He said that some web companies, worth between $200 million and $300 million just six months ago, are now willing to sell-up for $20 million to $25 million.