THE TIMES…THEY ARE A CHANGIN’……
It’s been another challenging year for the economy and consumers across our great nation. The
It’s been another challenging year for the economy and consumers across our great nation. The
Fed’s Q4 Beige Book reported declines, downgrades and more woes, although the December Black Friday weekend did shine a little light onto the retailing industry with sales up by 7.2% from mid-December 2007, according to the National Retail Foundation. But if 2008 is remembered as a tough year to be a banker or broker, 2009 is looking like a very tough year to be a consumer or retailer. And perhaps an especially difficult time to be a marketer or advertiser unless local businesses are counseled well by the brightest of media sales professionals who understand and have studied the outcomes of the past four recessions of late…1983, 1987, 1991 and 2000. Each had storybook surprises for local businesses and consumers. The changes in each recessionary environment bore different consequences and rewards. What is evident is the environment in our present 2008-2009 recession is that it comes at a time when we, as well as our global communities, are witnessing an historical U.S. presidential election and the immense challenges the new administration will face that will have an endemic affect on economies worldwide. To bring ourselves up to date and provide bold opportunities for the stimulating tests of our abilities which lie ahead, let’s review just the past nine months.
The election is over and having set historical precedent of electing America’s first black president amidst a world shaken by corrupt, unbridled financial pandemonium, manifested by Wall Street’s unscrupulous penchant for greed, a failure of an administration to appropriate oversight to monitor the bankers and mortgage brokers who encouraged the lending of assets to the economically depraved while incenting the insurance companies to back toxic mortgages, which also became the business model for Fannie Mae and Freddie Mac. Amidst this chaotic climate, our country suffers the morose affects of a six-year war in Iraq, Afghanistan and Pakistan, millions of Americans, whose mortgages which should have never been granted, are being made homeless by the recklessness bred by the self-indulgence and gluttony of the CEOs of mortgage companies and investment banking firms who seek their own rewards instead of their shareholders, whose trust they violated. Our country faces thousands of jobs lost as a result of the credit crunch, exorbitant energy costs, and the failure of the automotive industry to create a competitive environment with fuel efficient vehicles instead of apparently being in bed with the oil companies, who enjoy the ongoing production of gas guzzling cars and SUVs to feed their CEOs and speculators’ wallets.
Additionally, the loss of, or great reduction of, ad revenues flowing to TV from the auto industry will be widely felt by media companies who continue to chose transactional business as their primary business model, instead of developing and serving well the preservation and growth of local businesses which has always been the strongest pillar of our economic foundation. Diane Mermigas of MediaPost Publications and well known business media analyst reports the Television Bureau of Advertising vastly lowered its 2009 TV station ad forecast to levels recently set by Wall Street analysts, saying it now expects local spot sales will decline 4% to 8% and national spot will be down 11.5% to 15.5% next year. Only election-year spending helped to save local TV in the first ten months of this year. Still, the owned-and-operated TV stations of Disney/ABC, CBS, News/Fox and NBC Universal significantly underperformed pure-play broadcasters for the second consecutive quarter, due partly to less battleground-state political exposure.
With as many as 1,000 local auto dealers expected to go out of business by next year and the big three domestic automakers seeking federal aid to avoid bankruptcy, local ad-supported media pain has only just begun. Auto ad spending, which contributes about 25% of the industry-wide local ad revenue base, was down about 40% last quarter for major TV station groups like Fox.
Local cable, which generally outperformed local television last quarter, could sneak up on broadcasters in these difficult times as a prelude to a complete rollout of the new addressable, interactive advertising and data that Canoe Ventures fronted by major cable system operators. “The credit crisis has magnified trends that were already in motion.
For most of the decade, advertisers have been viewing interactive media as a more efficient, less costly way of reaching consumers than traditional media buys,” Borrell observes. Advertising expenditure dials have “just about been adjusted for interactive media,” which means that local TV especially must position itself to capture double-digit growth during a recessionary recovery by 2010.
Thus, the changes which are manifest in the auto industry may well be as dire as with the real estate industry at present and its ancillary businesses such as furniture, floor covering, wall covering, remodeling and landscaping. The credit crunch and consumer exhaustion may spread to other businesses. Finally, we have suffered an administration’s failure to provide adequate health care and affordable prescription medicine to the uninsured and the elderly, a deepening recession and a $700 billion dollar bailout which promised immediate relief yet immersed in paralysis.
The consequence of this untimely economic disaster is wreaking havoc on the media and their clients who seem to be in a state of flux. Most direct clients however are not so morose and are more than willing to invest in their future and the salvation of their business. The key to the success of a business has always been throughout each and every economic downturn maintaining their consistency as that will fare far better for them to maintain their brand awareness and its equity, and consumer brand confidence, as opposed to sitting on the sidelines while their competition eats up their market share. You must inspire that trust if you are to help the forge forward. But foremost, you must believe in it yourself.
The good news is that all cycles have a beginning and an end. We are at the beginning of the end of a cycle at this time. No one knows how long it will take to transition from the end of one cycle to the beginning of another, but the next phase in a new cycle is recovery and expansion. Today, there is more true wealth in the world than at any time in history. It is in everyone’s interest to keep the system sound and improving it. Our nation’s greatest successes have begun during troubled times such as these. Bob Dylan once lamented, “The times, they are a changing. Come senators, congressmen please heed the call, don’t stand in the doorway, dont block up the hall. For he that gets hurt will be he who has stalled. There’s a battle outside and it is ragin’. It’ll soon shake your windows and rattle your walls…for the times they are a-changin’.”
For all that is said and will be written about these times, you must be at the beginning of the changes and arouse those about you not to settle for the gloom that you hear and read about. For all that will do is hold you back from the great future that lies ahead. Reinvent yourself. The only rescue that’s out there is the one you provide for all who wait for you to show up. The playing field for everyone has now been leveled and the continuum of growth local businesses seek is in your hands…for your future and theirs begins now, for the times…they are truly a changin.’
The election is over and having set historical precedent of electing America’s first black president amidst a world shaken by corrupt, unbridled financial pandemonium, manifested by Wall Street’s unscrupulous penchant for greed, a failure of an administration to appropriate oversight to monitor the bankers and mortgage brokers who encouraged the lending of assets to the economically depraved while incenting the insurance companies to back toxic mortgages, which also became the business model for Fannie Mae and Freddie Mac. Amidst this chaotic climate, our country suffers the morose affects of a six-year war in Iraq, Afghanistan and Pakistan, millions of Americans, whose mortgages which should have never been granted, are being made homeless by the recklessness bred by the self-indulgence and gluttony of the CEOs of mortgage companies and investment banking firms who seek their own rewards instead of their shareholders, whose trust they violated. Our country faces thousands of jobs lost as a result of the credit crunch, exorbitant energy costs, and the failure of the automotive industry to create a competitive environment with fuel efficient vehicles instead of apparently being in bed with the oil companies, who enjoy the ongoing production of gas guzzling cars and SUVs to feed their CEOs and speculators’ wallets.
Additionally, the loss of, or great reduction of, ad revenues flowing to TV from the auto industry will be widely felt by media companies who continue to chose transactional business as their primary business model, instead of developing and serving well the preservation and growth of local businesses which has always been the strongest pillar of our economic foundation. Diane Mermigas of MediaPost Publications and well known business media analyst reports the Television Bureau of Advertising vastly lowered its 2009 TV station ad forecast to levels recently set by Wall Street analysts, saying it now expects local spot sales will decline 4% to 8% and national spot will be down 11.5% to 15.5% next year. Only election-year spending helped to save local TV in the first ten months of this year. Still, the owned-and-operated TV stations of Disney/ABC, CBS, News/Fox and NBC Universal significantly underperformed pure-play broadcasters for the second consecutive quarter, due partly to less battleground-state political exposure.
With as many as 1,000 local auto dealers expected to go out of business by next year and the big three domestic automakers seeking federal aid to avoid bankruptcy, local ad-supported media pain has only just begun. Auto ad spending, which contributes about 25% of the industry-wide local ad revenue base, was down about 40% last quarter for major TV station groups like Fox.
Local cable, which generally outperformed local television last quarter, could sneak up on broadcasters in these difficult times as a prelude to a complete rollout of the new addressable, interactive advertising and data that Canoe Ventures fronted by major cable system operators. “The credit crisis has magnified trends that were already in motion.
For most of the decade, advertisers have been viewing interactive media as a more efficient, less costly way of reaching consumers than traditional media buys,” Borrell observes. Advertising expenditure dials have “just about been adjusted for interactive media,” which means that local TV especially must position itself to capture double-digit growth during a recessionary recovery by 2010.
Thus, the changes which are manifest in the auto industry may well be as dire as with the real estate industry at present and its ancillary businesses such as furniture, floor covering, wall covering, remodeling and landscaping. The credit crunch and consumer exhaustion may spread to other businesses. Finally, we have suffered an administration’s failure to provide adequate health care and affordable prescription medicine to the uninsured and the elderly, a deepening recession and a $700 billion dollar bailout which promised immediate relief yet immersed in paralysis.
The consequence of this untimely economic disaster is wreaking havoc on the media and their clients who seem to be in a state of flux. Most direct clients however are not so morose and are more than willing to invest in their future and the salvation of their business. The key to the success of a business has always been throughout each and every economic downturn maintaining their consistency as that will fare far better for them to maintain their brand awareness and its equity, and consumer brand confidence, as opposed to sitting on the sidelines while their competition eats up their market share. You must inspire that trust if you are to help the forge forward. But foremost, you must believe in it yourself.
The good news is that all cycles have a beginning and an end. We are at the beginning of the end of a cycle at this time. No one knows how long it will take to transition from the end of one cycle to the beginning of another, but the next phase in a new cycle is recovery and expansion. Today, there is more true wealth in the world than at any time in history. It is in everyone’s interest to keep the system sound and improving it. Our nation’s greatest successes have begun during troubled times such as these. Bob Dylan once lamented, “The times, they are a changing. Come senators, congressmen please heed the call, don’t stand in the doorway, dont block up the hall. For he that gets hurt will be he who has stalled. There’s a battle outside and it is ragin’. It’ll soon shake your windows and rattle your walls…for the times they are a-changin’.”
For all that is said and will be written about these times, you must be at the beginning of the changes and arouse those about you not to settle for the gloom that you hear and read about. For all that will do is hold you back from the great future that lies ahead. Reinvent yourself. The only rescue that’s out there is the one you provide for all who wait for you to show up. The playing field for everyone has now been leveled and the continuum of growth local businesses seek is in your hands…for your future and theirs begins now, for the times…they are truly a changin.’
Philip Jay LeNoble, Ph.D.
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