2009 Advertising Outlook Grim for Most Media

Experts Paint a Pessimistic Picture, Even for the New Ad Media

Nov 6, 2008
Carroll Trosclair

Bad news for newspapers. - Click Art

Reports say the ad outlook is pessimistic for everything from the New York Times and network television to magazines, online display, social sites and mobile networks.

In late 2008, the advertising industry appeared to be headed in the same direction as the American economy, except that the federal government is expected to provide some help to the economy in 2009. Advertising couldn’t even count on a Christmas bonus and 2009 had nothing in sight to replace the 2008 Olympics and federal election campaigns.

Advertising’s most optimistic view for 2009 comes from Sir Martin Sorrel, the chief executive officer of the WPP Group in London, and Dave Morgan, founder of TACODA and Real Media. In discussing the 2009 economy, Sorrell and Morgan said "don’t count out the American consumer(s) and their demonstrated ability to buy their way out of recessions and depressions "through innovation and optimism and sheer will."

That may seem a bit unrealistic for a consumer group suffering from heavy unemployment and debt loads. But keep in mind that the words come from the man who brought two of America’s legendary agencies, J. Walter Thompson and Ogilvy and Mather, into the WPP fold.

Other reports are not so optimistic.

New York Times Ad Revenue Down

The New York Times reported that its 2008 third quarter advertising revenues were down 14.4 percent from the same period in 2007, despite a 12 percent increase in its website advertising.

The U.S. News & World Report, once one of the nation’s leading news weeklies, announced it was cutting its publication schedule to monthly and would focus coverage on its website.

Television networks and stations were expressing fear of severe cutbacks in 2009 advertising. Holly M. Sanders of the New York Post reported in November 2008 that very few "scatter" spots were being purchased. She quoted one cable ad sales executive saying "the marketplace is dead. There is no new business or additional ad categories coming in."

That’s a stark contrast to the fourth quarter in 2007 when there was a huge demand for the "scatter" spots.

TV Execs Worry about 2009 Contracts

Sanders said no cancellations had yet been reported, but said TV executives worried that advertisers would begin canceling some of the billions of dollars worth of 2009 commercial time they contracted for earlier in 2008.

The New York Times reported October 13 that revenue from newspaper websites declined 2.4 percent in the second quarter of 2008. Circulation, print advertising and newspaper jobs have been declining for many months and there was nothing on the horizon to break the fall in 2009.

Editor & Publisher, the industry magazine, has been full of stories in 2008 about newspapers cutting staffs, reducing pages and simply folding. The Christian Science Monitor in October dropped its print edition and focused on its website. Conde Nast announced it was reducing the frequency of Portfolio and Men’s Vogue magazines. It closed down Golf for Women. Hearst shut down CosmoGirl. Some newspaper columnists wrote about the eventual disappearance of printed newspapers.

The American Press Institute (API) scheduled a closed-door, invitation-only conference in November to discuss "concrete steps the industry can take to reverse its declines in revenue, profit and shareholder value."

Decline Expected in Online Display Ads

Even the highly touted new advertising media expected problems in 2009. Dave Morgan said he expected at least a 10 percent decline in online display advertising in 2009.

Mark Walsh wrote in MediaPost that "spending on emerging media such as social networking sites, digital out-of-home and mobile is likely to contract next year as marketers tighten ad budgets."

According to Walsh, Donna Speciale, president of investment and activation at MediaVest USA, told an ad media panel in New York that "09 is not the year for testing. Brands want to stick with areas that are tried and true."

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