The forecasts were hardly doom and gloom, as no companies forecast a return to the recessionary days of the early '90s. Perhaps more telling was the quieter tone surrounding this year's confabs-the sessions last December were suffused with sheer giddiness as dot-coms rained gold on publishers and agencies.
Robert Coen, senior VP-director of forecasting for Universal McCann, forecast U.S. ad spending to increase 5.8% to $250.0 billion in 2001, as compared to a blazing 9.8% increase this year. Mr. Coen's comment "about a soft decline in advertising feels about right," said Meredith Corp. chairman-CEO William Kerr at the UBS conference.
Some companies simply ran out the clock on their presentations. Internet companies fresh from layoffs, such as DoubleClick and 24/7, took pains to downplay any news of softness in the Internet ad arena by spending time ballyhooing upcoming products.
Dow Jones & Co. revealed a sudden softness at its flagship Wall Street Journal-ad volume was down 12% in November and about 30% in December from last year's record results-would cause it to miss analysts' earnings estimates. The company spent the bulk of its presentation at Credit Suisse First Boston touting its Dow Jones Newswires products in a manner long on depth but short on financial details.
`HIT SOMEWHAT HARDER'
"We were hit somewhat harder" than other newspapers, said Dow Jones CEO Peter Kann, and this hit was amplified by how strong the Journal closed 1999. The Journal posted ad revenue gains of 52.3% for December 1999; still, Mr. Kann said that excluding "sharp declines" in tombstone advertising and a onetime 32-page IBM Corp. insert that ran last December, linage was still down in the single digits this month.
Even higher-flying newspaper companies saw slower times ahead. The New York Times Co., which has repositioned its flagship in time to capitalize on newspapers' fastest-growing category, national advertising, expected next year's overall ad revenues to rise between 5% and 7%, compared to a 10% gain through November of this year.
Gannett Co.'s USA Today predicted ad revenue growth of 7% in '01, compared to 11% this year. In one ominous sign, Gannett's Midwestern dailies saw total advertising revenue decline 0.2%.
Citing the ad slowdown, News Corp. President-Chief Operating Officer Peter Chernin said his company had implemented a hiring freeze. Knight-Ridder announced it would take a charge against earnings this quarter in conjunction with eliminating 30 positions across its newspaper portfolio.
Agency holding companies, which took the dais at UBS Warburg the day after Mr. Coen forecast softening ad spending, touted a switch in focus from traditional advertising to a greater reliance on higher-margin marketing-services divisions. And execs at Interpublic Group of Cos. and WPP Group said they were likely to continue their shopping sprees. "There is no reason for anybody to cut their throats-at least not yet," said WPP CEO Martin Sorrell, about the coming year.
America Online Chairman-CEO Steve Case predicted his company's proposed merger with Time Warner would close by year-end. USA Networks Vice Chairman Victor Kaufman said his company would sell or find a partner for its TV stations, citing difficulties of operating stations in a consolidated media world. Spanish broadcaster Univision Dec. 7 agreed to buy USA's 13 stations for $1.1 billion cash.
Some levity was provided by Martha Stewart Living Omnimedia Chairman-CEO Martha Stewart, who screened excerpts from her broadcast TV Christmas special, including one skit where she performed with "Saturday Night Live" cast member Ana Gasteyer, who often spoofs Ms. Stewart. "I got to parody the parodist," Ms. Stewart joked. "She could not do two things at the same time. She left feeling a little bit inadequate."
Given the run of the last few years, execs at the conference may have left feeling a little bit inadequate themselves.
Contributing: Laura Hughes, Richard Linnett, Stephanie Thompson, Tobi Elkin