Elections and Olympics to Drive Big Year for Advertising

Major events in 2012 could give the advertising industry a healthy boost according to MagnaGlobal, an advertising firm. The company adjusted their advertising forecast for the coming year to $152.9 billion, taking into account a predicted $3.1 billion windfall from upcoming elections and the 2012 Olympics who already count McDonald’s (NYSE:MCD) as a sponsor. MagnaGlobal says we can expect 3.7% growth in advertising despite a weak economy and a slow down in the industry in late 2011 because of the big events.

In 2012 the Supreme Court relaxed rules regarding political campaign spending which now allows super PACs to raise and spend an almost unlimited amounts on advertising. The Hollywood Reporter quoted Vincent Letang, executive VP and head of global forecasting at MagnaGlobal who said, “These new rules, combined with the intensity of the political battle (evidenced already by the Republican Primaries) and the high number of swing states, are likely to generate the highest-ever political spending in 2012: $2.5 billion just for television.”  Letang went on to add, “The Olympic Games broadcast will generate an incremental $630 million, bringing the total political and Olympic impact to a record $3.1 billion for television alone”.

According to MagnaGlobal, without the elections and the Olympics the advertising industry would grow 2 percent to $149.8 billion in 2012, a decline of 2.5% compared to 2011’s 4.5% growth. The firm says that broadcast TV spending will grow 8.5% while total TV will grow 6.8%. After growth of 21.4% in 2011, MagnaGlobal says Internet spending will slow to 10.9% growth.