First-half outlook:
Better than you'd think
The second quarter is looking particularly strong
By Diego Vasquez
Aug 18, 2010
First-half advertising spending numbers from Nielsen Monitor-Plus and Kantar Media should be out any day, and despite some recent gloomy days on Wall Street, not to mention disappointing retail and unemployment numbers last week, analysts expect to see strong gains over the first half of last year. A big part of that is the soft comparisons: First half 2009 was a dismal time for the ad economy. Kantar Media (then TNS Media Intelligence) measured last year's first-half decline at 14.3 percent, with all but two categories seeing declines. But analysts say television had a big first half, with scatter, spot and cable all up. The internet has held up well through the recession, and even print categories such as newspapers and magazines have seen their pace of decline ease, though they're still not in the black. Edward J. Atorino, media analyst at The Benchmark Company, talks to Media Life about what to expect from the first-half ad revenue reports.
What media sectors seem to be coming back strongest in first half?
TV, it's way ahead of everybody. Cable is next and I guess the internet was okay. But TV had a phenomenal first half and it will be even stronger in the second half because of two big drivers.
One was auto. Some companies have seen 40, 50 and 60 percent increases. Also, political started slowly but has ramped up rapidly and is adding to the growth.
Which are still lagging?
Newspapers. They are getting better, quote-unquote, the rate of decline has come down a lot. But they're in a minus-6, 7 or 8 percent range. The comparisons are pretty easy and retail and national are coming back a bit, but classifieds are still way down.
And magazines have been a mixed bag. The weeklies are doing poorly, but the broad-based women's magazines and some of the fashion titles are doing a bit better.
Did growth increase or decrease in second quarter compared to first quarter?
Second quarter was better, much better.
Magazine actually broke into the black. Everything got better in second quarter; it pretty much got better across everything.
Now the wild card is the second half. The comparisons get a bit tougher, but TV should be stronger through the end of the year. Cable's right behind and the web will be fine.
Has there been anything surprising or interesting about the major media companies' first-half results that stuck out?
A couple of companies knocked the cover off the ball. Disney's media businesses and CBS did extremely well. All the broadcast companies exceeded expectations and have raised their forecasts for the year.
Time Inc. had a pretty good second quarter, and Meredith as well. In second quarter the catch phrase was "sequential improvement" [laughs], I love that.
Would you say the media economy recovery is progressing faster, slower than, or the same as the general economy?
I guess better. The expectations are pretty low, which always helps. But it was up against a very bad first half of 2009, so second half will be tougher.
Are you seeing any signs in the second half of the year that make you think the recovery will accelerate or decelerate?
Again, the only thing that has any visibility like that is TV. Bookings are strong with very little signs of a slowdown. Part of the strength in TV is the political money, and of course there's only a fixed amount of available time. Advertisers may stop with the wait-and-see attitude and put money on the table.
Plus, TV is proving to be a powerful medium to move stuff—new product introductions in categories such as auto and fast food
It's doing a lot better than some skeptics thought.
But certainly political and auto are making the numbers pretty large.
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