The Ad Recession Is Two Years Old. How Long Will It–And Layoffs–Last?
Here’s your obligatory scary stat for the day: The ad recession that’s responsible for so many layoffs has been in effect for two years, by one count, and will extend for at least another year in the U.S. That would mark the first three-year decline in ad spending since the Great Depression.
So says Ad Age, which rooted through the projections made earlier this month by Interpublic (IPG) research czar Bob Coen. That’s a great/grim nugget, because it puts what happened over the past few months–and what will happen in the next few months–in context. So does this table from Coen’s report (click to enlarge):
If you’d like to put even more of a pallor on your week, consider that Coen, like his colleagues at other ad conglomerates, is an optimist compared to prognosticators who work outside the business. Fitch Ratings, for instance, predicts a U.S. ad spending drop of six to nine percent next year.
Which is why the media layoffs that we saw crest at the end of this year are destined to continue in 2009.
Some of them will be at media outlets that still haven’t made the cuts that their peers have gone through, but will soon: My former employers at Forbes, for instance, have yet to consolidate the company’s magazine and Web staff, but when they do in January, they’ll be laying people off. We’re also likely to see cuts at Disney’s (DIS) ABC unit in the near future.
Just as worrisome: The notion that companies that have already made one round of cuts, like Time Warner (TWX), will be back for more once they get a better grip on how ad sales are really performing.
Over the weekend, for instance, the New York Post’s Keith Kelly reported that first quarter revenue at Condé Nast could be down 30 percent, prompting another round of contraction at that publisher. A year ago that would have been laughable. Now it sounds sadly plausible.