Much has been written about the unfavourable year-on-year comparisons foisted upon the media industry in Q1 and Q2 2001. Despite this being somewhat self-inflicted (think sky-high TV prices resulting from the dot-com payload) it is worth noting that, on a larger scale, the media industry is in far better shape than it was in the 1990/91 recession when the fall in spending by major advertisers brought the industry to crisis point.
In 1991, the Advertising Association was predicting that adspend growth for the year would come in at around -6% against previous forecasts of +3%; currently the AA forecasts that spending in the UK will grow by +3.9% in 2001. It is apparent that the general malaise within the industry centres around inflated TV revenues in Q1 and Q2 last year, fuelled by the ‘dotcom boom’. However, Advertising Association forecasts were actually revised up in March, thanks to a healthy outlook for many media sectors.
Radio, according to the AA, is still on for a good year with revenue growth forecast at around +9.5% and much the same can be said of outdoor. A beneficiary of TV advertising pricing itself out of the market, the AA forecast outdoor growth at +7.8%. Likewise, Zenith Media put radio and outdoor growth at +5% and +7% respectively.
National newspapers do not appear to be suffering, as most thought they would with the rising popularity of the internet, and all areas of the press are still expected to show increases this year. The AA put press growth at around +4% although this figure belies the expected success of national newspapers (+5.6% growth) and business magazines (+4.8%). Zenith Media, the doomsayers of ITV, also continue to forecast an increase for press this year, albeit a small one (+0.1%).
Casting aside ‘year-on-year fixation’, Zenith Media took a look at 1999/2001 comparisons and its findings were not at all bad. Global advertising in 2001 is expected to come in around 12% higher than in 1999 and US adspend as a percentage of GDP remains the same as it was in 1999 (1.4%) in keeping with “an incremental but generally positive trend since the last recession”.
Europe follows a similar pattern but, unlike the US, growth expectations for 2001 remain in positive figures. Zenith Media forecasts that European advertisers will spend 13% more in 2001 then they did in 1999.
The boom of 2000, when viewed in soft light, could be considered a blip on the media horizon. Zenith describes 11% growth in 2000 as “astonishing and quite unsustainable” and whilst this year’s comedown has encouraged many major corporations to reign in spending, the recession of 1990/91 appears to have taught the marketers a valuable lesson. Although marketing spend has declined, creative use of budgets spread across the advertising sector has provided a boost to those industries previously overlooked by the TV devotees.
