As such, speakers at the Television Bureau of Advertising's annual forecast conference Sept. 6 gave attendees radically different sets of marching orders. Some advised the audience to keep wringing their hands, while others counseled the crowd to continue to shrug things off and trust that business as usual would carry the day.
A drop for 2009
TVB forecasted total spot advertising growth of 9% to 10% for 2008, reflecting a political cycle featuring a presidential race with no incumbent and next summer's Olympics. But the momentum of new media and the impact of the current credit crunch on Wall Street could temper the market next year, TVB said. The trade group, which represents local TV broadcasters, called for total spot advertising to fall 2% to 4% in 2009, reflecting a drop in national spot advertising that year, which is seen dipping 8% to 10%.
Two potential challenges are worrying to the local-TV business: the advent of new media venues, such as the web and mobile devices, and the shifting patterns of the automobile industry.
Brian Wieser, senior VP-director of industry analysis, at Interpublic Group of Cos.' Magna Global, suggested that changes forced by new technology such as DVRs and video on demand will actually be limited. Not everyone can afford to add costs to their cable subscription, he pointed out, and the amount of time consumers spend with the web grows along with income. He described marketers' interest in new venues as "incremental," and indicated to the audience that conventional media would continue to dominate the landscape.
Category's 'Pyrrhic victory'
Not so fast. Another speaker, Jon Swallen, senior VP-research of TNS Media Intelligence, pointed out shifting spending patterns of big marketers that gave the audience reason for pause. Mr. Swallen said automaker spending is in a three-year slump, with advertising leaving newspapers for spot and national TV. At the same time, he noted that the trend is a "Pyrrhic victory" for the industry, which is snagging "a larger share of a shrinking pie." Other categories, such as motion pictures, fast-food restaurants and department stores, are moving their budgets towards more national media.
Political advertising, meanwhile, is often a welcome torrent for local-TV stations in election years. State and local advertising in 2008 will be dominated by a few of the smaller states with inexpensive media markets, explained Evan Tracey, chief operating officer of TNS Media Intelligence/Campaign Media Analysis Group. At the same time, spending from candidates for the office of U.S. president is expected to be robust, with Mr. Tracey calling for a "likely" floor of $750 million for TV spending related to presidential elections.