Conditions in the US advertising markets are starting to look ‘a little brighter’, according to Initiative Media’s CEO, Alec Gerster. In a conference call with Merrill Lynch analysts, Gerster said that although the ‘tone’ of the ad market is improving, it remains uneven and there does not appear to be a swell in demand prior to the year-end.
The US upfront market has been strong for Q4, with network television inventory somewhat oversold. As a result, the scatter market – where advertisers pick up spare airtime at a later date – has remained fairly dull. Scatter pricing is holding at the upfront levels, but due to a lack of rising demand, prices are not moving up.
Gerster says that clients are still honouring their upfront commitments for Q1 2004 and notes that Q2 and Q3 are likely to be stronger in terms of revenue, as that is where the most inventory was sold.
Looking at different media, network TV is healthy, magazines a little weaker and newspapers pretty stable. TV stations are still not that strong, but local spend is shaping up better than national, partly as a result of strong national expenditure a year ago due to political spending. Radio is similar to TV, whilst cable is on the up, according to Merrill Lynch’s report.
Gerster also said that the internet is now getting business for the right reasons. Online used to be over-resourced, but became under-resourced following the dotcom bust. Gerster said that when used properly, the web can create a lot of leverage and is a legitimate direct response tool.
Initiaive Media is the world’s largest independent media services company, with over $21 billion worth of billings.
