As if to set up Advertising Week, the industry convention running through Sept. 25 in New York, a parade of media bigs at Goldman Sachs' Communacopia media conference offered a united front last week, saying the advertising market is improving.
News Corp. Chairman and CEO Rupert Murdoch told analysts the ad markets are “much better than they were four months ago,” and added that results are “getting better every month and getting better every week.” CBS Corp. CEO Les Moonves said pretty much the same thing, and with February's Super Bowl XLIV already 70% sold, things would appear to be looking up. By Sept. 17, Bernstein Research was giving further reasons for hope, noting reports that Toyota would join General Motors and Target in ramping up fourth-quarter ad spending. And media stocks gained another boost.
But there's ample evidence to make one question whether we're looking at green shoots or a false start. TV saw a 10% drop in overall dollars through June, according to TNS Media Intelligence, and things will appear better through the second half because of easy comparisons in third and fourth quarter. TNS' Jon Swallen said the rate of decline across all media has been level throughout the second quarter, but quickly added, “While it's tempting to interpret this as a positive indicator that things aren't getting any worse, the fact remains that the market has been steadily tracking at around 14% declines and this represents billions of lost revenue.”
Spot TV saw the biggest declines, at 27%, followed by Spanish-language TV, down 12.7%. Network TV came in at 5.5% down and cable was off 3.6%, while national syndication held pretty steady, down by less than a point.
One broadcast network ad sales chief admitted that it was hard to say whether the ad market would continue to strengthen or simply fall back again. If consumers' current just-in-time buying trends are any indication, Black Friday won't be the biggest shopping day of the year; Dec. 15—payday—and Dec. 23 might be better candidates.
Advertisers might be similarly tempted to shorten their campaigns. One TV industry sales executive predicts that the fourth quarter might open quieter than the third quarter because agencies are still focused on expanding their upfront buys and making presentations to advertisers.
WPP Group's CEO Martin Sorrell has a vested interested in painting the bleakest picture of clients' ad budgets: His media agencies negotiate to spend dollars across the globe. But at the Goldman Sachs confab, Sorrell appeared to deliver a more honest assessment of where we really stand. Consumer spending patterns have changed for the long term, he observed, and while the anniversary of Lehman Brothers' bankruptcy has provided a sense of relief that markets didn't collapse and deals are still being done, “confidence is better, but it doesn't translate into people signing checks,” he said.
“It has been a catatonic experience and everything has been affected…I wouldn't be of the view that things are getting better,” Sorrell added. “It's all sequential data. We don't look at that; we look at year-to-year. I don't see any green shoots—if anything, bare rocks. We don't even see the moss. It's still pretty tough.”
The smarter way to stay on top of broadcasting and cable industry. Sign up below.
Thank you for signing up to Broadcasting & Cable. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.