They don’t have theme days at the annual UBS Global Media Conference in New York this week, but the opener of this year’s could have carried the title, “Tales We Tell Ourselves to Get Through the Recession.” Top of the list is that even in bad times business has product to move and advertising gets that job done.
A little more specifically, Sir Martin Sorrell, CEO of the London-based WPP Group agency and David Poltrack, who directs research for CBS, said a recession can represent an opportunity for better-off companies to build market share. The American big three and even Toyota may be cutting back, for instance, Sorrell said, but Volkswagen has already picked up its European marketing and seems to be starting to do so in the United States as well.
Several of the forecasters have been around as long as this conference (now in its 36th year). They conceded this crash was the worst in their professional lives but recalled that business looked pretty terrible in 1975 until an uptick combined with the bicentennial celebration to bring advertising out of its doldrums.
Robert Coen, of the IPG Group, who has presented an ad forecast to open the conferences, is looking for a 7 percent overall decline in advertising in 2010, 5 percent if you back out the 2008 boost from politics and the Olympics. (That includes a 10 percent drop in national advertising for newspapers and 12 percent in the local portion of newspaper advertising.) Both he and Poltrack, conceding their views were optimistic, said they could see the recession starting to lift by the second half of the year.
Sorrell said he was not that hopeful. Maybe financial markets will start a rally, he said, but the real economy won’t be bouncing back until 2010.
Sorrell did find a novel good news advertising story in 2008 — the Obama campaign. “He executed a well-nigh perfect combination of old and new media,” Sorrell said, “Don’t forget the half-hour infomercial before the deciding World Series campaign along with all the online fund-raising. Thank goodness, he won. If he spent all that money and lost, what would it say about the effectiveness of the industry?”
I heard more good cheer from representatives of the cable and broadband industries. Technically those connections are not an essential like food or shelter, they argue, but in subscribers’ minds, they’re pretty darn close. Even in hard times, customers are loath to cancel.
Most newspaper companies are presenting Tuesday and Wednesday, but one of my blackberry-toting investor friends provided a cold splash of bad news with the 2 p.m. bulletin that Tribune Co. had indeed filed for bankruptcy.
Not exactly stunning given the company’s huge and ill-timed debt load, and the meager results of tinkering by Sam Zell and his lieutenants, who have given no evidence of insight into the newspaper business during their 18 months at the throttle. It will be hard for creditors and a bankruptcy judge to do worse. Still it is painful to see so many papers and journalists with prospects that are even more uncertain and bleak than they were yesterday.