Jack Myers and Michael Nathanson Read the Media Tea Leaves

That is why sitting down with two financial experts like Michael Nathanson Senior Research Analyst at MoffettNathanson and Jack Myers Founder of MediaVillage helps to put the future of media spend into a manageable perspective This Jack Myers Leadership Conversation took place last week where they delved into their previous forecasts earlier this year and revised their predictions with the most up to date data View the full video Leadership Conversation ondemand hereA Look Back at Past ForecastsWhile Nathanson was surprised at the market upside and noted that the data points were better than he expected since his predictions in April Myers was less sanguine quotThe caveat beingquot Myers stated quotthat we were anticipating a shorter term downturn with maybe less of a long tailquot But maybe he averred the long tail is longer than we expectedBack in April Myers had taken quota more contrary point of view to most of the consensus regarding the economy based on a more pessimistic view of how the government and nation would respondquot His more pessimistic forecasts have unfortunately proved prescient Consumer confidence which drives the economy needs reassurance that a vaccine is imminent but the path to a vaccine is a long one with the best case according to Myers occurring in the second quarter of 2021 quotSo any recovery between now and then would be dependent on actions like this and a more aggressive use of masks and social distancing things that have not been happening successfully around the countryquot he explainedThe Unclear Future of SportsquotSports seem to be such a pivotal issue for the industryquot noted Myers Is it possible for sports to return in the third or fourth quarter of this year For Nathanson sports may start but it is unclear whether it may finish the season For Myers the challenge in predicting spend is that quotSports advertising budgets are based on the need for flexibility and cancellation options and not reallocating budgets to other dayparts that are nonsports Those are big concerns for the networksquot Myers is quotSeventy percent sure that sports are unlikely to happen I agree that it will start I am not sure where the leagues will wind upquotAfter to speaking with educators across the country Myers is also sure that colleges will reopen in the fall but quotas of Thanksgiving they are anticipating and planning for a shutdownquot So the start and stop schedule for college in addition to the unpredictability of pro sports does not bode well for the remainder of 2020 quotThere are so many uncertainties and the risks are so high that we are more likely to see delays into the second and third quarter of next year before we see any meaningful return to sports and until there is a vaccine And I projected that we would not see an Olympics until 2022 which has a major impact across the ecosystem I am still holding on thatquot he concluded Because sports programming covers the range of media from national to regional to local and across all media the revenue impact of a lost season for sports programming is especially worrisomeAd Spend Performance Going Forward In reviewing his forecasts from earlier this year Myers reiterated that his forecasts quothave certain assumptions and predictions that are not consensus views around sportsquot Referring to his chart mapping the economic impact of the 1918 pandemic Myers noted that the same tactics that we are experiencing today from the lack of Federal action to a reliance on the states to manage the outbreaks resulted in a four year long recovery into the Roaring Twenties Of course medicine today is more advanced and the hope for a vaccine in two years is not unreasonable today But Myers sees a quottwo years downturn in the economy I believe we are going to see increasing negativity comingquotMyers compared a best case and worst case scenario in July to his original forecasts in January which were generally positive Looking at July market prognosticators appear to be more optimistic than Myers who noted that quotThe consensus view seems to be in the low negative teens in terms of the overall advertising in the midteens for the legacy linear advertising and flat amp8230 or even on the plus side for some forecasters for digitalquot But Myers himself believes that in the best case total advertising will be off 143 Legacy down 208 and Digital which does not include Facebook down 7 while worst case is 20 29 and 93 respectivelyExamining individual media sectors such as Cable Broadcast Local Print and Audio best case worst case quotwe are continuing to see downturns anticipating minimal sports revenue I39m anticipating only 2030 of what some other forecasters are anticipating in terms of sports revenues That is a primary reason for my more negative best case scenarioquot Some digital sectors can expect upsides such as Search Marketing Online Originated Video Video Game advertising quotOverallquot Myers said quotcontinuing a downturn in digital media with strength around Interactive OTT and AddressablequotAnd Yet Some Bright SpotsThere is a bright spot in the area of content creation Myers noted that the logjam between Writers Guild and top agents seems to be breaking down quotwhich is good newsquot for the industry enabling fresh material for contentstarved viewers And reality shows game shows and even movies are in production quotIn Hollywood they have begun casting couples and roommates So they are beginning to cast people who are social distancing with each other and finding a path towards original productionquot he explained which could help with ratings performanceNot Facing Reality BitesquotIn times like these plans are useless but planning is essentialquot noted Myers referring to a quote by Winston Churchill quotWe need planning with best case and worst case scenariosquot he stated quotThe message that I communicate is be prepared for the downturn in the economy Be prepared for reality As we look at the Upfront the scatter markets and some of the realities across the media ecosystem and agencies I39m feeling a sense of complacency A sense of 39it39s not as bad as we anticipated or feared so let39s move forward business as usual39 Frankly it scares me if we move forward businessasusual and not prepare our businesses for the potential downturnsquot he concludedThe next Jack Myers Michael Nathanson Leadership Conversation is scheduled for September 17 The full MyersNathanson Conversation and all Jack Myers Leadership Conversations are available ondemand at MediaVillageAlso read MoffettNathansonamp8217s Michael Nathanson Shares Media Update and Forecast by Jeff MinskyClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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