The Newspaper Association of America (NNA) says newspaper advertising is going to drop another 11 percent this year. Even more troublesome is that the NNA isn't so bullish on online ad revenue growth for newspapers this year, which it sees as low as 1.8 percent. Maybe next year will better, the report says.
Part of the challenge goes beyond the migration pains of moving print to an increasingly digital world. The recession is slowing down local media markets. According to American Express' Open Small Business Monitor as reported by AdvertisingAge, concerns about cash flow have risen since and capital-investment plans are among the lowest since the study first began. Just under half of small-business owners plan to cut back or delay marketing expenditures.
Such cutbacks go much further than impacting newspapers. Local radio and television stations are feeling the pinch. And, along with them, so are the agencies paid to produce the work. Public relations doesn't seem to be exempt, but the idea it owns social media is tenuous at best.
Now everyone wants a piece of any space showing the slightest signs of growth. But trying to crowd ten "social media experts" in a boat built for two seems pretty risky, especially if the pitch sounds even more snake oil than every other Tuesday.
So who will fare well in the communication industry? Like always, companies with diversified interests and relatively few cash cows tend to fare better. Local retail is still very strong and necessary services (like plumbing and electrical) are outpacing others. It's also the reason that some agencies are, so far, content to offer messages of strength.
Why? It's not rocket science. When economic times seem tough, you tend to want to work with those who seem largely unaffected.
You know what I mean? It's hard to buy a newspaper ad when everyone seems to think their money is best spent elsewhere and the industry's decline shows few signs of flattening any time soon. I don't think that's a good thing, but it will not change until newspapers stop forecasting their own demise.
2 comments:
More words:
"The consumer environment has been impacted by events in the financial markets over the past month. In September we experienced a weakening sales trend that was greater than our earlier expectations. We are monitoring business trends carefully and making the appropriate adjustments. As a result, we believe our inventories, expenses and capital expenditures are well-positioned for current economic conditions. We remain focused on serving our customers and offering a balanced merchandise offering." — Blake Nordstrom, president, Nordstrom.
Even more words:
The second quarter 0f 2008 was up 12.8% from a year ago--but growth was essentially flat from the first to second quarter this year, suggesting that the weakening economy is taking a toll on Internet spending. — CNN
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