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Agencies See Tough Year for Broadcasters

According to the latest forecasts from media buying
agencies, 2013 will be a tough year for broadcasters with no Olympics, while
cable should see modest gains.

Assuming the U.S. economy avoids falling off the fiscal
cliff, Magna Global, the media forecasting and negotiating strategy unit of
advertising agency holding company Interpublic Group of Cos., predicts that
U.S. television advertising revenues will decrease 1.9% in 2013, partly because
of weaker demand and partly because 2012 was pumped up by an election year.

Magna and Zenith are among the agencies announcing new forecasts
Monday morning at UBS' 40th annual Global Media and Communications
Conference in New York.

Absent Olympic spending and with continuing long-term
audience erosion, Magna says revenues of the national English-speaking networks
will drop 3.6%.

Minus election year spending, local broadcast revenue will
plunge 9%.

National cable, with its audience still growing, will see a
4.6% increase in ad revenues in 2013, according to Magna.

In the U.S., Magna expects ad spending in all media to grow
only 0.6% following the 4% growth of 2012, which was fueled in part by the
Olympics and elections.

Digital advertising revenues in the U.S. will increase by
11.6%, Magna says.

"Tablets have been the fastest device ever to reach 50
million users in less than three years. As they become more affordable, we are
seeing an explosion in the volume and the nature of mobile media usage,"
Vincent Letang, executive VP, director of global forecasting for Magna, said in
a statement.

"Marketers are gradually embracing the new marketing
and branding opportunities: mobile advertising already represents $6 billion
globally, i.e. 6% of digital advertising and 1% of total advertising,"
Letang said.

Magna is predicting the format to grow to $24 billion by
2017, reaching 14% of global digital advertising and 4% of overall advertising

ZenithOptimedia, a media agency that is owned by Publicis,
forecasts that ad spending in all media in the U.S. will grow 3.5% in 2013,
4.4% in 2014 and 4.7 in 2015, following 4.3% growth in 2012.

"While we are well past the worst of the economic
downturn, economic growth remains slow," Zenith said in its report.
"We continue to see TV dollars moving from network to cable, and this
trend will likely continue as cable networks continue to add quality
programming to their lineups.

Zenith puts 2013 network TV spending down 2%, and sees
declines of 1% in 2014 and 2015 as dollars shift to lower-priced cable. That
will push cable up 7% in 2013, 2014 and 2015, the agency said.

Spot TV is projected to grow 3% in 2013, 4% in 2014 and 3 in
2015, according to Zenith. Syndication is also seen increasing by 2% in 2013,
1% in 2014 and 1% in 2015. "The strength of the comedy and talk genres, an
increase in inventory and strong potential for newcomers, all contributed to
our revised projections," Zenith said.

Magna predicts that global ad revenues for all media will
grow 3.1% in 2013 from $495 billion in 2012. That forecast is a downward
revision from its previous report. Magna says the lowered forecast is the result
of a slowdown in economic growth, continued economic uncertainty in Europe and
the U.S., and the cautious marketing spending that occurred in the second half
of 2012.

Further down the road, Magna expects global ad revenues to
grow 6% in 2014 and 4.9% in 2015.  Growth is being slowed as media prices
on a cost-per-thousand viewers (CPM) basis is being driven down as marketers
switch to digital.

On the plus side, Magna points to innovation in audience
measurement, targeting and monetization and the capacity of some traditional
media categories to reinvent themselves (e.g. digital formats increasing the
yield and profitability of out-of-home advertising).

Zenith expects global advertising spend to expand by 4.1% to
$518 billion. Most of the growth will come from Internet advertising, including
social media and online video, with traditional media growing only 1.7%.

"Advertisers are willing to increase their budgets
wherever they can achieve a strong return on investment," says Steve King,
Global Chief Executive Officer for ZenithOptimedia Group. "This means that
developing markets, social media and online video are all growing rapidly,
supporting continued expansion in global ad expenditure despite stagnation in the