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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (5477)	7/2/2001 10:05:05 AM
From: MeDroogies	Read Replies (2) \| Respond to of 74559

The article you quoted actually supports my points. The point which I made was based on the fact that things had gotten SO bad that it was beginning to show signs of a pick up - that is, we've seen a bottom. The reason this year is going to be the worst in a decade is really due to one thing. That being the three quarters of 2000 remained very strong while it fell off a cliff in the fourth of 2000 and first of 2001. Comparisons of 2001/2002 advertising will indeed look bad when compared to 2000. However, when you consider quarter on quarter advertising, things have actually already begun to improve. What IS a problem, from the ad sales standpoint, is that many companies (NBC, CBS (in particular) and ABC, all as examples) did not alter their forward looking business plans dramatically enough when faced with the end of the year debacle. As a result, they have all suffered substantial decreases in their cost-per-thousand as well as in their overall revenue. For them, this is not a good situation. The top-tier cable companies suffer a similar fate. Interestingly, lower rated cable companies are seeing cost per thousand increases as well as revenue remaining flat or increasing. This is due to several factors. 1. they are starting from a low base. 2. their rating have actually increased 3. advertisers, despite a weak market, are bargain hunting using optimization programs. Lower grade broadcast networks (Fox, WB, Pax) aren't being hit nearly as hard as the top level networks, either. In fact, without making it evident which company I work for, we are seeing increases across the board. The question, from an advertising standpoint, is where the "scatter" market will be - the market that occurs as the year progresses. Comments like the one you point to rarely able to make predictions on that...it's one of the fatal flaws of advertising that the companies have no idea which of their clients will actually have money until the budget itself appears. I have negotiated deals in the past with advertising firms for millions of dollars, only to have it withdrawn at the last minute because "the company decided not to spend the money". Similarly, I have negotiated last second "opportunistic" deals in markets like this....when clients realize $1mm in advertising can be placed cheaply and have major benefits. My comments are, and will continue to be, based on the facts as they occur within my industry. Gerald Levin pointed out to reporters that he didn't see any problems in the ad market. Several spokesmen for Fox made similar comments. These two companies are among the largest in the world...I'm willing to accept that as some indication that things are not as bad as they are made to be. Remember, it's in Zenith's best interest to paint as bleak a picture as possible....they'll get lower rates if they plead poverty. BTW, I remember that you first made some of your comments with respect to ORCL, which continues to chug right along. Seems they've weathered the storm with little downside. Overall, I haven't seen a thing that would lead me to alter my viewpoint.