Play it close to the vest

UBS Equities downgraded its ad spending forecast for the new year: the new estimate for online revenues, for example, is 1.4% growth, compared to UBS’s old estimate of 10.4% growth.

The firm expects that in 2010, the online ad market will be back to double-digit growth, writes paidContent (via MediaBuyerPlanner).

As for the suffering newspaper ad industry, UBS expects global ad revenues to drop another 11.7% in 2009, following a 6.7% drop in 2008. Ad revenues will continue to slide in 2010, with an expected 2.8% drop. U.S. newspapers will fall more than the global market, plummeting 19.4% this year, followed by an 11.4% drop in 2010.

Magazines will drop 8%, revised downward from the 3% drop UBS was predicting last fall.

In December, ZenithOptimedia cut its forecast for 2009, predicting US ad spend overall will fall 6.2%; down significantly from its previous revision in October, when the group touted 0.7% growth for the year.

While ad spend in 2009 will suffer, Zenith believes a recovery will begin in the second half of the year, with mild year-on-year growth compared to the difficult second half of 2008.

UBS also pointed out that Madison Ave. is experiencing longer-term, secular shifts that are in the process of transforming the advertising economy. Those shifts could affect the advertising market beyond the current economic cycle.

Advertising will decline relative to the GDP in 2009 and 2010, the firm predicts.