The start of the new year has been full of signs that the recession that began in 2008 is only worsening. Newspaper layoffs have continued, magazines like Meredith’s Country Home have folded, and the latest numbers from the Publishers Information Bureau showed a shocking 17 percent decline in ad pages during fourth-quarter 2008. Thus smart media people are outlining plans of how to approach a challenging 2009. That may mean looking for new places to place their clients, reexamining options that in the past had appeared cost-prohibitive, or finding better cross-platform opportunities. In fact, during this down period for the media economy, creativity and innovation may be more important than ever to keep clients happy and costs down. Elizabeth Herbst-Brady, president of MAGNA, talks to Media Life about the coming year in the media economy. This is the sixth in a series of 2009 previews with experts in different fields of media.

How will the recession affect the media economy?
 
Secular trends will continue to be more pronounced, but broadly speaking the recession will drag growth down (or lead to declines) for all sectors.  This does not mean that every client will employ the same strategy.
 
Regardless of economic conditions we must actively determine ways to differentiate our client’s brands to move their business forward and invest their marketing dollars in the most strategic manner. As their business partners, we need to help them navigate the turbulent market and even reinvent the way we operate as an industry.

At all costs, we cannot cut innovation and need to continue examining the price-value relationship for all our investments. We encourage our clients to be more flexible and fluid. MAGNA has recommended six best investment practices to our media partners to help identify the best path:
 
Question all traditional assumptions. Do a clean audit on all properties. Those that may have been historically too expensive might surprisingly become available. Conversely, those platforms or properties only used for efficiency may not be relevant or even necessary.
 
Identify key platforms and partners. Wherever possible create deeper, more meaningful relationships to service as many aspects of your marketing efforts as possible.
 
Explore all contact options and assets. Work with media owners who can offer cross-platform incentives. Media owners might be more willing to leverage one platform for another.
 
Be performance obsessed. Use the softness of the market to protect your client’s investment. Change metrics (and the currency) to incorporate more rigorous ROI. All the inflexibility around measurement should be open for discussion.
 
Control the purse strings. Retain flexibility to optimize campaigns within media platforms to maximize leverage and ensure price advantage.
 
And keep your eyes open. Identify opportunities where you can gain share of voice from your competitor. Perhaps a key event or property will become available or a brand can secure exclusivity where it was previously unavailable and ultimately block the competition.
 

How is new technology influencing the ad economy?
 
It makes targeting cheaper (i.e. through online inventory), supports lower operating costs for executions of media (when all players participate, as with local television’s EDI [electronic data interchange] efforts) and allows for continued market expansion relative to what might otherwise exist (i.e. better ways to utilize inventory means that it can be relatively cheaper for new classes of advertisers to use media).
 

Which areas of the media economy are poised to hold up the best during this recession?
 
Two areas of the media economy are poised for success. First, search and direct marketing because of their sophisticated and accessible ROI metrics. Second, cable because of its dual revenue stream [subscriptions and advertising].
 

Which will experience real hurt?
 
Local TV, radio and print are the platforms which are the most challenged.
 

As you mention, categories like local radio and newspapers have been particularly hard hit. How much of this is the economy and how much is simply a shift in where advertisers are putting their dollars?
 
Much of the decline is based on sentiment (in the case of radio) but also on declining consumption in some cases (i.e. newspapers). Classifieds are hit with declining consumption, weakening economic fundamentals and superior alternatives.
 

Will we see internet ad spending surpass any other categories this year in terms of overall ad spending share?
 
Yes, particularly if you include search in your numbers.
 

Worldwide, which ad economies are in the best shape in 2009? Why?
 
Among large (or potentially large ad economies), India and China stand out. Both are maturing as advertising economies, and consequently, even under a global slowdown, should still see high-single-digit-growth overall.