March did not bring a lot of cheer to the US advertising industry, with results disappointing across most media, according to a round-up by Merrill Lynch.
The impact of the war with Iraq has been less than expected, although separate reports are now claiming that the SARS outbreak poses a whole new threat to the health of the advertising sector.
Merrill says that newspaper companies posted largely flat revenues in March, closing the quarter up 1.5%-2.0% – below analyst expectations. The broker forecasts Q2 growth of 2.5%-3.0% and 3.0% full-year newspaper adspend growth, down from the already-lowered 3.5% forecast.
Television station revenues showed flat to middle-digit declines in March, although there is a pick-up emerging for Q2 (see INSIGHTanalysis: US TV Advertising Rebounds, Radio Lags). The network TV upfront market is expected to show a rise of at least 5%, as prices rise in line with better ratings. Jack Myers forecast figures, released today, predict that the total upfront season will see a rise in spend of 9.6%.
In the radio sector, Merrill Lynch estimates that revenues were down by 0.5% in March, taking Q1 growth to 3.7%. Magazines, meanwhile, posted a 14.5% rise in revenues in Q1, according to PIB data (see US Magazine Revenue Rises 12% In March).
“The year has started out slowly and we are unlikely to see a material acceleration in Q2 unless the economy gets a jump start. The ad agencies are still indicating pent-up demand, which combined with expectations of a good network TV upfront market could be just what the doctor ordered. Mind over matter, we say,” concludes chief analyst Lauren Rich Fine.
