New Orleans ad market revives in fits and starts

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Less than three months after it was washed out by Hurricane Katrina, the New Orleans media market is showing signs of life, with advertising dollars beginning to flow again to local outlets.

"The outlook is positive," said Ashton Phelps Jr., publisher of the New Orleans Time-Picayune in an interview. "Insurance checks have started to come in. Local auto dealers as well as businesses selling items to replace those lost in the storm are enjoying record sales. Many local stores are leading their national companies in sales increases."

Mr. Phelps said The Times-Picayune, which had a circulation of 270,000, is now distributing 80% of its copies. It published only on the Internet immediately after the storm and its staff had to temporarily relocate to a building at Louisiana State University.

The newspaper, owned by Advance Publications, saw an increase in ad support from insurance companies and financial institutions, law firms, health care and some other local businesses. NOLA.com, the Web site affiliated with the newspaper, saw some growth in revenue and audience after Katrina.

The hurricane, of course, took an untold toll on human life and property damage in the Gulf Coast region, sending much of the population fleeing and destroying many local businesses. Third-quarter insurance payouts from the storm totaled $34 billion, contributing to a record-high quarter, according to the Insurance Data Group.

State of flux

PQ Media projects that Katrina will be responsible for $1.13 billion in lost revenue from advertising and communications spending between August 2005 and September 2006. Local advertising is projected to lose about $470 million over that time period.

"A lot of advertisers have backed off the market," said Jean Pool, exec VP-chief operating officer of Universal McCann, which recently reopened its spot-buying office there. "Selling products and services is not top of mind down there."

All four of New Orleans' local TV stations were knocked off the air during the storm, but have long been back on the air. About 200,000 or so homes in the area are estimated to be without access to cable TV.

"It's still in a state of flux," said Sue Johenning, exec VP-director of local broadcast at Initiative. "Things are coming back to normal but people are anticipating it's going to be another 12 to 18 months before the city is back to full capacity." Ms. Pool seconded that. "It's going to be a long time before that market is back to where it was and it never was a big investment market to begin with. This was a critical blow."

Mr. Phelps declined to speculate when The Times-Picayune could return to pre-Katrina days, but he is optimistic.

"We see many opportunities for growth as New Orleans rebuilds," he said. "Most obvious are new housing starts and related retail sales that will come from building and furnishing new homes."

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