Whilst many US media companies are seeing an improvement in their businesses, it is not the beginning of a true advertising recovery and merely marks a ‘crawling out of the hole dug in 2001’. This is according to an analysis of current advertising and media conditions in the States by analysts at Merrill Lynch.
The broker says that the current scarcity of network TV spending is also artificially inflating the sense of recovery. A similar process has taken place in the UK press and TV markets, where inventory has been reduced in order to drive demand and sustain prices.
Ad revenue comparisons are now beginning to ease as the year progresses and this should become increasingly evident as the months pass, says Merrill Lynch. However, March did not seem to get a boost from early Easter spending.
Media companies have easier comparables than agencies Media companies have easier comparisons throughout much of 2002 than do the ad agencies, says Merrill Lynch. “Advertising turned down rather severely early in 2001 while agencies were still benefiting from market share gains, gains in marketing services and ad campaign spending. Agencies should benefit from easier second half comparisons,” according to the report.
