With Double Dip Looming, Media Companies Urge Wall St. Caution

I have been reluctant to write this week39s economic report wwwjackmyerscom on the health of the advertising and media business Although I have been one of the more bearish of industry forecasters I have been impressed by the vitality of the industry recovery while remaining conservative in my 2010 and 2011 projections for ad spending Unfortunately my caution appears to be justified as economic forces make a double dip recessionary cycle and its potential impact on media too apparent to ignoreThe advertising business achieved its zenith in 2007 at 2263 billion spread across 19 media categories Even if the ad market were to miraculously grow 50 annually in 2010 2011 and 2012 it would still total only 210 billion 7 below 2007 levels Myers actual 2010 2011 and 2012 projections cast a more gloomy pictureAmong traditional media categories only cable network television online display and cinema advertising are projected to generate more advertising revenues in 2012 than in 2007 according to an exclusive analysis published in this week39s Jack Myers Media Business Report Even with the robust network TV Upfront market and a steadily recovering ad business economic realities require that media and advertisingdependent companies explore alternative revenue models if they are to achieve and sustain meaningful growthSeveral weeks ago I reported quotEven with a double dip in the general economy there is sufficient confidence in the sustainability of the media industry recovery to survive additional setbacks The catastrophe in the Gulf of Mexico and its economic impact will intensify over the next several weeks dragging down the general economy with it The increasingly depressing news in Europe and inevitable unforeseen events on the horizon will further slow the recovery Yet all indications are that the media industry remains reasonably healthy and a safe harbor for investors and marketersquotWhile I still hold this opinion with a double dip becoming more of a certainty as stock markets fluctuate and economists vacillate media executives have wisely played down the strength of the media industry recovery and urged caution in their forward outlooks although they appropriately tout strong yeartoyear growth

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With Double Dip Looming, Media Companies Urge Wall St. Caution

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Jack Myers

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