The Advertising Apprentice

August 6, 2009

Mixed Emotions from Forecast

Filed under: Advertising — adamlauzon @ 7:09 PM
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An article from Monday’s New York Times talks about the results of Veronis Suhler Stevenson’s (VSS), a private-equity firm, Communications Industry Forecast that was released on Tuesday. You can find their forecast for 2009 – 2013 here.

The article states that the communications industry in 2009 will likely see a decrease of 1% in spending. In an industry where a single percentage point could easily represent millions, or even billions, of dollars, that’s a pretty big deal! Even more cause for concern is that this is the first decrease in spending in over 4 decades.

The U.S. has gone through six “official” recessions during this time:

  • December 1969 – November 1970 
  • January 1980 – July 1980 
  • July 1981 – November 1982 
  • July 1990 – March 1991 
  • March 2001 – November 2001 
  • December 2007 – Present

Unfortunately “communications spending” is different from “advertising spending” which VSS predicts will continue to see decreases for 2009 and 2010. Relief will come in 2011 they say, but how great will it be and how long will it take the industry to rebound from the 2.9% loss from 2008, the expected 7.6% loss from 2009 and the expected 1% loss from 2010? Only time will tell.

Another interesting component of this report is the areas of advertising that are facing the biggest losses: print media (newspapers and consumer magazines) and broadcast media (radio and television). This adds fire to the debate for those who say that traditional media are on their way out.

They do have an argument because non-traditional forms of advertising are growing. Such areas such the Internet, mobile advertising, and video games continue to see substantial gains.

Taking everything into account, this advertising apprentice is quite optimistic for the future. I have faith that the traditional media will overcome the challenges ahead and they will adapt. I look forward to becoming more familiar with the media that are becoming more and more effective in reaching increasingly large segments of the population.

Another reason to be optimistic the report suggests that over the next five years the media industry will be the “third-fastest-growing economic sector behind mining and construction”!

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