|Scott Donaton, editor of 'Advertising Age.'|
IT'S OFFICIAL: THE RECESSION IS OVER
National Bureau of Economic Research Makes Its Pronouncement
U.S. marketers increased first-half ad spending a healthy-sounding 6.8%, to $61.6 billion, according to the most recent data from TNS Media Intelligence/CMR. It's the first first-half gain since peak year 2000. Cable and syndicated TV, local newspapers, magazines and the Internet were among the media segments that posted double-digit gains. Network TV, the medium most in demand during the downturn, was the only major segment to decline. But the drop was minuscule and attributed largely to the comparison to a 2002 first half that included the Olympics.
Even business-to-business magazines, a category that tends to lead going into recessions and lag coming out of them, posted gains. The outlook is also looking brighter in the larger economic picture, where there has been GDP growth and stock price gains.
Good news, but ...
That's good news for industries sorely in need of it. But the performance doesn't reflect the mood of the advertising and media businesses, and it hasn't yet trickled down to affect day-to-day reality for most people. Job hunters have yet to see signs of a turnaround. I've spoken to several qualified candidates in recent weeks. All report the job market remains bleak. Some have dampened their ambitions and lowered the bar of their expectations. They'd be happy just to be back at work.
The numbers, at least, accurately reflect the employment situation. As Advertising Age's Brad Johnson reported last month, while U.S. ad spending is on track to surpass 2000, "prospects for advertising job growth are limited." Employment is down considerably at Internet publishers, newspapers, magazines, TV and radio networks and public relations shops. Ad agency employment stands below 1990 levels. That reflects the economy, and long-term factors such as consolidation and client-squeezed margins.
Those in search of work aren't the only ones who say it still feels like a recession. Over a pricey expense-account lunch last month, a usually bullish magazine publisher told me that, despite a strong performance by his book this year, he's concerned the fourth quarter could go soft. Other media sellers, adept at finding silver linings yet skittish on the topic of recovery, voice similar concerns.
Within agencies, marketing organizations and media companies, budgets remain tight. Companies are reluctant to invest in new initiatives or employee incentives.
For a lot of U.S. businesses, September starts budget season. Many go into it wary about the prospects for 2004. Even those that anticipate growth are reluctant to commit to significant spending increases until they see a sustained flow of money. After three tough years, some would also like to enjoy fatter margins for a little while.
This is the time to defy expectations and loosen the belt a few notches -- even if hurts to do it. Industry leaders have a responsibility to restore the confidence of their businesses. They can do that through the most basic measures (above-average raises, more boots on the ground, funding for new ventures) and through more ambitious ones. The American Association of Advertising Agencies is spearheading Advertising Week in New York City, a festival to be held in September to celebrate the business. The event aims to improve the image of advertising among clients, practitioners and, to a smaller degree, consumers.
It's one step in the bid to boost the morale of an industry battered by the recession. What's your contribution?