BtoB's Daily News Alert on July 13 contained the following headlines:
Direct marketing employment outlook shows improvement
Magazine ad pages continue to decline.
Magna says U.S. ad spending will fall 14.8% this year
Report: "BusinessWeek' for sale
Study: Social network ad spending tapers off
Taken collectively, these stories reveal broad, significant trends in media and advertising.
Let's start with the last item first. According to research company eMarketer, advertising expenditures on social media sites this year will drop 3% overall to $1.1 billion. Is this a scary sign that budgets are so strapped that marketers can't find funding for this new—and, pointedly, cheap—medium? While budgets are tight, I'd suggest the spending drop is just as likely a reflection of marketers reining in their initial enthusiasm, coming to view social media not as a panacea (and without ROI metrics, it never will be that) but as one more channel to integrate into their campaigns. (By the way, Facebook is expected to buck the overall trend and see a 9% increase in ad spending this year to $230 million, according to eMarketer.)
Another item, the shocking news that BusinessWeek had been put on the block, has been reported and discussed widely. This story crystallizes the grim reality that, in today's publishing world, even great brands can topple when their advertising base evaporates. The McGraw-Hill Cos. title had seen its ad pages decline 36.8% in the first half of this year compared with the same period in 2008.
The extent of the advertising decline is the subject of two other stories. First there's the forecast from Magna, a division of Interpublic Group's Mediabrands, that U.S. ad spending will total $161 billion this year, down 14.8% from $189 billion last year. According to the report, the first half will be the worst period of the recession, with ad revenue down 18% from the same period last year. Next, Publishers Information Bureau figures released by the Magazine Publishers of America show consumer magazine advertising pages fell 27.9% in the first half and that many national business titles joined BusinessWeek in posting double-digit declines, with drops ranging from 19.3% to 38.2%.
Magna projects ad spending will continue to decline through the second half of next year and will not begin to grow again until the second half of 2011. If correct, this forecast means BusinessWeek won't be the only media asset to be put on the block.
There was one bit of positive news in our July 13 alert—at least for direct marketing job seekers. According to a June survey by direct marketing recruiting company Bernhart Associates Executive Search, 20% of survey respondents said they planned to add staff during the current quarter. That was up from 16% who said they intended to hire last quarter. Even better, the e-mail survey of 402 companies found the number of companies saying they planned layoffs in the current quarter declined for the third quarter in a row. While the number of companies reporting hiring freezes held steady at 30%, this was the first quarter in two years its hiring index showed improvement overall.
Ellis Booker is editor of BtoB and BtoB's Media Business, and can be reached at email@example.com.