Analysis: Media Forecast 2010

It would be an interesting, albeit purely academic exercise to imagine how the advertising industry would look right now if we hadn’t been hit with the biggest economic downturn since the 1930s. Perhaps instead of hastening the migration of ads from traditional media to the Internet, the Great Recession actually slowed things down. Imagine if marketers, media firms and advertising agencies hadn’t been in such a cautious frame of mind over the past year or so and unleashed breakthrough ideas that moved us further along on the continuum than we are today. We’ll never know because the ad industry’s running narrative, like most other industries, got hijacked by the economy.

The story now is a continued migration to new media but complicated by what looks to be a fragile economic recovery. Thus, the bottom line looms large over the industry in 2010. In general, it is projected to be a better year than the previous one, but not by much, at least here in the U.S. Still, everyone’s up for some good news at this point. At least you can count on the Winter Olympics and the congressional races for a bit of relief.

As with previous years, we expect that the action will be on the margins. The bulk of media dollars still changes hands the old-fashioned way. The Internet may claim more ad dollars in Great Britain right now, but in the U.S. it’s still not even close. That will no doubt change but not over the next year.

A more likely scenario is that some concepts will undergo a stress test. For instance, in a media landscape with hundreds of channels, what is the value of a broadcast network? What role does salesmanship play in a business as data driven as marketing is today? Does it make sense for magazine and newspaper publishers to continue to give away their content if Web ad revenues still are a fraction of those derived from print? Do those publishers have any choice?

If history is any guide, things won’t play out the way you might guess. Disruptive technologies are, by definition, impossible to predict and immensely powerful for that reason. Nevertheless, here are our best guesses of where things are going, barring any unforeseen and inevitable new developments. —The Editors


FORECAST 2010: CABLE TV

By Anthony Crupi

With apologies to Thomas Friedman, the world may well be flat, but it’s also an inclined plane. Substitute the rigors of economics for physics and 2009 was a year in which the proverbial (and euphemistic) excrement ran downhill at an unnerving rate, so much so that anyone who happened to be camped out at the lower latitudes didn’t exactly come out smelling like a rose.

As it happens, ad-supported cable enjoys an enviable perch near the vertical; as such, the top-tier networks were able to get through the year relatively unsoiled. Along with record ratings and a resilient ad sales marketplace, signs that the tidal murk of recession is beginning to recede have many observers anticipating an even stronger 2010.

One ad sales chief, who spoke on condition of anonymity, says that the last dark cloud on the cable horizon has been dispelled by recent consumer behavior. “We’ve been holding our breath, but it looks like the holidays were a success,” the executive says. “Any momentum we had going into next year would have been wiped out if Christmas had been [lousy].” Holiday retail spending was up 2.3 percent during the week of the 25th, while year-over-year activity for the peak November-December period improved 3.6 percent, per SpendingPulse, a service from MasterCard Advisors.