SEERS PREDICTING DOWN YEAR FOR TV ADVERTISING
Last recession year for TV advertising was 1991, and “it appears the industry is heading that way again in 2001” in terms of national spot, prominent stock analyst predicted last week in face of broad indications of major cutbacks by largest TV advertisers. First quarter of year looks particularly bad for TV stations, he and others predicted. Radio on other hand will show ad growth of 7.5-8% next year, according to Gary Fries, pres. of Radio Ad Bureau. “Radio is 80% a local business with revenue sources that defy national trends,” he said.
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Gloomy predictions follow banner 2000 -- fueled by Summer Olympics in Australia and political campaigns. Local TV stations took in more than $160 million from Presidential race alone, according to Alliance for Better Campaigns -- ad dollars that won’t be spent in 2001. “We're very cautious” about prospects for national advertising, particularly in first quarter, CEO of major TV group told us. Advertising for new cars could be the key for much of economy, he said, and “we're watching that very closely.”
Most broadcasters tell us tax cut promised by President-elect Bush would be huge benefit to media. “Right now, the consumer confidence” in the economy is fragile, one told us. Robert Coen of Universal McCann predicted last month that while advertising in all U.S. media will be up 5.8% (to $250 billion) in 2001, big 4 TV networks will show only 1% increase -- with same for national spot (CD Dec 7 p6). CBS’s David Poltrack, however, said TV network billings will increase by 7% in 2001 -- down from 12.5% in 2000 -- if there’s no strike by Hollywood unions as many are predicting.
Radio “generated huge double-digit” gains in 2000 (13% ahead of 1999), RAB’s Fries said, and “while we will see a leveling off to a more realistic figure in the first half of 2001, the trend in revenue gains will continue on an upswing.”