- Georg Szalai, The Hollywood Reporter

U.S. advertising spending will decline 1.8 percent this year and 3.6 percent next year, and not even the Internet will be safe, Citi Investment Research predicted Tuesday.

Media analysts at the bank lowered their ad forecasts across media categories, with Web estimates hit particularly hard; they also warned that a rebound in ad momentum likely won't come until 2010. (Related: "TVB Cuts Local Ad Projection.")

The Citi team became the latest to downgrade its outlook for the U.S. ad market in a report titled Batten Down the Hatches: Credit Crunch, Consumer Spend Slowdown & Advertiser Pullback Lead to Prolonged Ad Market Downturn.

Citi analysts Catriona Fallon, Jason Bazinet and Mark Mahaney had called for 0.2 percent growth in 2008 and a 0.3 percent gain next year.

"The pullback in ad spending by local businesses compounded by national advertisers holding off on budgets is causing a slowing across all U.S. ad media," they said.

The analysts expect an ad rebound only after signs of a strengthening economy, which Citi's team of economists project for fourth quarter 2010. "An ad recovery could elude us until 2010," the Citi media team concluded.

Meanwhile, UBS analyst Michael Morris on Tuesday updated possible 2009 recession revenue and earnings scenarios for media conglomerates and their various divisions.

For example, Morris expects Disney's ad-driven broadcasting unit to report a 5 percent decline, but he said a "bad case" scenario could lead to a 10 percent drop and a "worst case" scenario to a 15 percent reduction. Disney's cable networks unit could swing to a 1 percent or even 7 percent revenue decrease from Morris' 4 percent growth assumption, he said.

News Corp.'s broadcast TV unit could be the worst hit, with the UBS analyst expecting a 15 percent fiscal-year 2009 drop that could expand to 17 percent or even 24 percent in the worst case. Its cable networks unit looks safer as Morris predicts an 11 percent gain with downside to 2 percent growth.

For CBS' TV unit, his revenue scenarios range from a 6-15 percent decline, and for Time Warner's networks division, he predicts a 3 percent plus with downside all the way to a 7 percent drop. Finally, Viacom's cable networks could see advertising revenue fall anywhere from 4-15 percent, Morris said.