Crisis/Opportunity for Traditional Media

Various pundits and media execs are speculating about when any recovery will start: Will it be 2009 or 2010? Generally there’s agreement that the first half of next year — and maybe all of next year — will be challenging. And traditional media may be fighting for their lives in some cases.

From the NY Times:

Ad spending in the United States this year is being “really pulled down by extreme softness in spending at the local level,” according to another speaker at the conference, Robert J. Coen, senior vice president and forecasting director at Magna in New York, a media services unit of the Interpublic Group of Companies.

He is predicting a 16 percent decline in ad spending for local newspapers in 2008 compared with 2007. By comparison, Mr. Coen is expecting local television ad spending in 2008 to fall 9 percent from 2007; local radio, 8 percent; local yellow pages, 3 percent; and other local media, 0.5 percent.

And it will be almost as bad for local newspapers come next year, Mr. Coen predicted, with ad spending declining 12 percent compared with 2008.

The figures for other local media in 2009 are not as bad: local TV, down 7 percent; local radio, down 6 percent; local yellow pages, down 5 percent; and other local media, down 3.7 percent.

And Jack Myers says:

But Yellow Pages will dip in 2009 below their 1998 revenues of $12.1 billion. Myers Report projects Yellow Pages advertising will decline 12 percent in 2009 and 6 to 10 percent in 2010, following a four percent dip in 2008. (Myers will issue its adjusted 2009 advertising investment forecast next week.) While Yellow Pages continues to be a multi-billion dollar business – far from extinction – the industry’s economic growth prospects are non-existent.

All print media are struggling with the same reality. While some magazine publishers are moving quickly to identify and invest in alternative revenue models ( ), the magazine industry for the most part remains dangerously dependent on traditional print advertising revenues that are eroding at a rate even more dramatic than Yellow Pages’ ad revenues. And newspaper ad revenues in some markets are all but disappearing as the auto, real estate, retail, entertainment and other core categories stagger toward a depression-like economic reality.

While this kind of shock creates a “deer in the headlights” effect and/or panic, now is the time to take some chances and be experimental. There are opportunities to be found and leveraged. Business as usual, ironically, may make these grim predictions a self-fulfilling prophecy.

Here’s GroupM’s global forecast (via MarketingCharts), which reflects the anticipated contraction in the US and EU markets.


Source: GroupM/MarketingCharts


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