If the Dow Jones continues its December pace, it would break its 2000 record the first week of February.
Top 2003 AdMarket winners: rebounding tech plays Yahoo!, Digitas and Intel. Two AdMarket stocks fell: AT&T Corp. and Johnson & Johnson.
As it stands, indexes remain below-and in the case of tech-heavy Nasdaq, far below-the level of March 24, 2000, when the S&P and broad Wilshire 5000 peaked. Yet since that market peak, 21 of the 50 AdMarket stocks have increased, including the majority of marketer stocks, seven of 18 media stocks and one (Grey Global) of seven agency issues (see table, at left).
The divergent fortunes of the marketer, media and agency sectors aren't a surprise. Marketers' revenues and profits have grown as companies benefit from a rebounding economy, productivity gains and tight cost controls. Consumer spending has driven this rebound, giving a boost to sellers of consumer goods and services.
Media companies, meanwhile, benefited from a recovery in U.S. ad spending, which last year broke 2000's record. While income statements are improving, many media stocks remain far below their bubble-bursting peaks of 2000. Yahoo!, for example, is 77% below its 2000 level despite nearly tripling in price in 2003. Old-media stocks, largely ignored during the dot-com boom, have done nicely since the bust; newspaper publishers Knight Ridder and Washington Post Co. are up 56% since 2000.
Many agency stocks remain far off 2000 levels in part because of questions about their prospects. Clients are demanding lower costs, and both clients and investors are debating the value of the one-stop shopping that agency holding companies spent so much money to assemble.
Perhaps the biggest agency success story: Publicis, which bought Bcom3 Group and began U.S. trading near the market peak in 2000, then held up comparatively well during the downturn and saw its stock rocket in 2003.
Worst-performing big agency stock: Interpublic Group of Cos., down 64% since 2000. Interpublic rose 11% last year and 61% since David Bell became chairman-CEO at the end of February, but Publicis, Omnicom Group and WPP Group still outperformed Interpublic for the year and that 10-month period. For investors, Interpublic remains the agency turnaround play.