Radio And TV Prep For Tough 2009
December 8, 2008 at 6:49 AM (PT)
First quarter has never been a big money-maker for local media. In 2009, that holds even more true. MEDIAWEEK reports that as the economy turned recessionary at the end of 2008, radio and TV stations began to step up staff cuts and initiate drastic cost-savings measures. At the same time, broadcasters slashed advertising rates, creating perhaps one of the best buyers’ markets ever. The only catch: Advertisers are still overly cautious, holding onto dollars until the last minute. And both buyers and sellers have their fingers crossed for some sort of a recovery in 2010.
"It’s a very competitive marketplace. Stations are ready to price to levels that we haven’t seen in a long time," said GROUPX MATRIX Pres./Local Broadcast ELLEN DRURY. "That’s good, because in the long run, that could bring in more local clients in the market that maybe sat on the sidelines."
A huge chunk of local broadcast’s bread and butter -- automotive advertising, which used to add up to 25% of a typical TB station’s revenue and 15% of local radio’s -- is disappearing, having shrunk an estimated $4 billion since 2005, according to TNS MEDIA INTELLIGENCE. Retail, another huge category for local media, is also suffering. According to a TNS RETAIL FORWARD report, same-store sales in NOVEMBER declined 2.5% for some 40 retailers. For the first nine months of ’08, MACY’S, HOME DEPOT, LOWE’S, JC PENNEY and BEST BUY all slashed ad budgets.
One silver lining in all the bad news: Retailers, who in recent years added stores and took their advertising national, may now shift more dollars back into local as they close stores or spend less on ads.