4A's conference: Big turnout signals media's optimism

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[new orleans] The American Association of Advertising Agencies' 10th annual media conference last week was marked by surprisingly strong attendance of about 1,000, and an atmosphere of guarded optimism.

War with Iraq was on attendees' minds, but the general belief was that a conflict will be short and advertising spending will increase soon afterward. This confidence was supported by news that scatter TV market pricing is rising, and by all indications there will be a blockbuster prime-time upfront. Some executives predicted a record upfront approaching $9 billion.

"There is a general feeling among many in our business that things are improving, and if not dramatically in 2003 then certainly in 2004," said 4A's President-CEO O. Burtch Drake in his keynote.

"Our first quarter was very strong," said Don Logan, chairman, Media and Communications Group at AOL Time Warner. "Early into the second quarter, too. There is some caution about what advertisers will be spending in the second half of the year, but I think that always happens."

He said AOL Time Warner's CNN is affected in the short term and that the company's newsmagazines will be touched in some way. "But the vast majority of our magazines, for example, are still advertising-building products. And magazine sales typically go up during times like these because people are looking for escape."

`prosperous future'

Steve Forbes, president-CEO of Forbes Inc., said the industry is "looking at a prosperous future," though he warned newspapers will likely continue to suffer through the current downturn. "Once we get through this thing, which will be a fast war, just two weeks, the economy will come back strong," he said.

Others were less optimistic. Lou Schultz, former CEO of Interpublic Group of Cos.' Initiative Media International and now a consultant at Interpublic and CEO of LMS Unlimited, said: "Consumer confidence is at an all-time low. My clients are very cautious. They see a recovery maybe in `04, but not this year."

The wait-and-see attitude was reflected among attendees also. According to organizers, only about 400 media executives pre-registered for the conference. But on the first day of the event, attendance swelled to an estimated 1,000, including top executives Robin Kent, CEO of Interpublic`s Universal McCann; Renetta McCann, CEO North America, Publicis Groupe's Starcom Worldwide; and Irwin Gotlieb, CEO, WPP Group's MindShare.

tale of two markets

The conference featured a panel on media consolidation with Robert Pepper, chief of plans and policy at the Federal Communications Commission and Michael Turner, president, Information Policy Institute in New York, who discussed the upcoming changes in media-ownership rules. "This is a tale of two markets," said Mr. Turner. "Consolidation in the national markets ... [means] there are more competitors in the national advertising scene and in the near-term that will result in lower advertising rates, a positive development. On the other hand, the effects are different in the local markets. Local rates, especially in radio, have gone up 90%."

Also at the conference the 4A's said discussions between the organization and Ernst & Young have established "the groundwork for a media-verification audit" that will result in permanent guidelines for media owners and agencies to follow. At issue are inconsistencies between the advertising schedules that run and the amount on the invoices billed by the media company.

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