Media & Money Conference: Outlook for Ad Business Grim

http://www.mediaweek.com/mw/content_display/news/media-agencies-research/e3ie0a4ec066acfa663dc5a9bd2e545f8cd

In past recessions, said Reif-Cohen, ad spending has been a “lagging indicator” - meaning that typically the business doesn’t take a hit until a quarter or two after a consumer recession starts and doesn’t recover until a quarter or two after it ends.

hat may explain why agencies and vendors have yet to experience several cutbacks in spending ( see this article). Instead what’s been happening is “a lot of just-in-time buying,” observed Millard. Lately, agencies and clients have been waiting until the last minute to commit to media plans, leading to more uncertainty than usual, even in media segments like magazines where that sort of buying is not par for the course. “I think we’ll continue to see that in all the channels,” she said, making it very difficult to forecast future spending.

The ad marketplace should be less challenging for the more measurable channels, particularly digital, according to Jack Klues, managing partner of Publicis Groupe Media’s recently formed VivaKi. Among his company’s different agencies Klues said he is seeing “a measured and mixed response” to the downturn, with clients in some categories like travel bearing down for tough times while some even mulling increased spending. He predicted that many agencies and media companies will use this period to reshape their businesses to become more efficient and more focused on data and precise targeting. “There’s an opportunity to change,” he said. “The paradigm is totally shifting...to a place where you focus on your best prospects.”