Barclays Capital has joined the ranks of those revising ad-revenue forecasts down in light of recent market developments. Contrary to its previous prediction of a 5.5% decline in U.S. revenues, Barclays now expects advertising to dip significantly below the levels of the 1991 and 2001 recessions.
During the last two recessions, ad spending dropped by a respective 2% and 6%. Barclays is forecasting a revenue year far worse than the dip following the events of September 11.
Local advertising, which makes up roughly 40% of the $252 billion U.S. ad market, will decline by more than 12%, while newspapers will lose 17% of their already shrinking revenues.
In addition, 2010 will not be much better: Barclays predicts only a 1% overall increase from 2009—despite the Winter Olympics and congressional elections—with most segments other than the Internet continuing on the downward trend.