BIA/Kelsey Commentary: Economic Signs Looking Up for Traditional Media


By Steve Passwaiter, VP, Business Development

We head into the New Year severely chastened by the historic revenue declines of the past year. For traditional media companies — not so much the new media companies that BIA/Kelsey also covers — they were several shades of awful.

Signs abound, however, of a modest recovery for traditional media. The broadcast networks are reporting an active scatter market of inventory held back from upfront sales. This makes the network execs who decided to hold back inventory at the upfront look like good market callers. Assuming that flat is the new “up,” some of the larger radio groups are reporting a decent December.

The American consumer seems to have provided the retail community some good news in the recently concluded holiday shopping season. The longer term outlook on consumer spending seems a little mixed but let’s take the good news for what it is.

We’re also coming up against weakened 2009 comps, but that’s a mix of good and bad news. And only assumes our frame of reference is the late 1990s, rather than the recent boom years. While current ad rates are still depressed, they could be bolstered by some advance demand.

But advertisers are still wary of the economy as unemployment remains high for a while. That will likely mean any advertising rate increases are going to be the result of some intense negotiation. That won’t be a change from 2009.

A lot of businesses — large and small — decided to cut back and/or sit out advertising in 2009. But there is a more positive outlook right now. Moreover, business owners know that they need to re-invite consumers through advertising campaigns into their showrooms in order to generate sales. There’s still business to be had but it will need to be seduced in no small part by solid and effective advertising. Can your current sales operation make that happen?

There’s some optimism for 2010 revenues as the nation prepares for its first mid-term election during the Obama presidency. This coming mid-term election is red hot and looking very competitive nearly everywhere across the country. With all 435 House seats, more than a third of the Senate and Gubernatorial races in states like California, Texas, Florida, New York, Illinois, Pennsylvania and Ohio, it’s a big, big year in terms of advertising.

This has generated the usual estimates of billions of political dollars in play spread out over several early year primaries and the November election. This is great news to parts of the media business that have seen more than their share of suffering this year. If true, these projections can put a big 2010 Band-Aid on a business that needed a tourniquet in 2009.

But what about 2011 when all that political money disappears and we’re back to the normal advertising marketplace? It would seem that the additional revenue in 2010 is a perfect opportunity for traditional media companies to address their shortcomings on the sales side of the industry with both the traditional and digital sides. If you’re not happy with the ups and downs of the odd-even year symphony that’s become our business, perhaps 2010 is the convenient time to address that. The best time to fix the roof is when the sun is shining.

The word of the day for marketers is “flexibility.” “As more media platforms become available, it is imperative that all marketers continue to assess their capabilities and select the platforms that are best suited to help them meet their brand’s goals and objectives,” said Bob Liodice, president and CEO of the ANA. “With this proliferation of media, marketers must work harder, survey the entire landscape available to them and create their brand’s most optimal media mix.”

It is hard to argue with that. But can anyone explain this to local marketers?  It’s time for local media sellers to step into that gap.

While we’ve all had our share of advertising agency adventures over the years, the simple fact is that your sales staffs are going to have to take more of that platform-agnostic mentality to effectively service direct local clients. The days of a single platform sale will become less common as we move into the digital age. Our local sellers are going to have to be able to construct ad campaigns that make multiple platforms work effectively in some synchronicity.

This Post Has One Comment

  1. Rich Wilhelm

    Yeah, STeve! You were right on about the political dough for sure! I am sure that EVERYBODY’S plan for ’11 begins with: “What NOW? Something DIFFERENT.”

Leave a Reply

Your email address will not be published. Required fields are marked *

10 + 19 =