“Forecasting industry trends and revenues is far more challenging this year than at any other time in recent history. The margin of error cannot be determined through statistical analysis. The degree of uncertainty in the market is extraordinary, impacting so many different areas of media and advertising.”
This is according to Jack Myers, chief economist at
Jack Myers Report, who yesterday forecast that the US upfront TV market will be flat for the 2002/3 season (see
US TV Revenue Forecasts Fall Flat). Myers notes that many industry observers have commented, positively and negatively, on these forecasts, which are based on trend data accumulated each quarter and ‘represent market conditions at a moment in time.’
“Media sellers, feeling bullish from a strong scatter market, find it difficult to believe that the market could fall off after two strong quarters. How soon we forget. It’s difficult to differentiate between false enthusiasm fostered by ratings erosion and genuine bullishness led by marketers’ desire to take advantage of consumer confidence,” says Myers today.
US is looking more positive than expected Next week, Jack Myers Report is to issue its US spending forecasts for all media for 2002 and 2003. “We’ll be issuing these forecasts at a time when media companies, both local and national, are feeling especially positive about their future prospects for growth,” he says.
Q1 and Q2 revenues have been considerably better than expected and global economic difficulties, economic disruption in Latin America and financial scandals in the US do not seem to have taken their toll on the economy the economy there, according to Myers.
He asks whether marketers and media buyers “have the stomach for a sustained, adversarial negotiation with media sellers in order to gain further cost concessions? Are media sellers willing to significantly reduce CPMs [costs per thousand (CPTs) in the UK], in order to increase their share of market?”
Marketing budgets are easy to ditch Marketing is one of the few meaningful budgets that offer flexibility, says Myers. “Budgets can be spent if market conditions justify, or put directly to the bottom line if sales are weak. In strong market conditions, this favours media such as television and especially radio. Magazine budgets are far less flexible. They support direct marketing, but reduce investments in sales promotions.”
Jack Myers says that it is this reality that is driving several of his ‘conservative’ forecasts for the upfront revenues and beyond. “I personally believe the media economy will take another blow before it begins a steady climb toward the end of this year. As a forecaster, I believe it’s better to be conservative and marginally pessimistic, than to lead a parade of bulls with horns blowing and flags waving.”
