The advertising industry is showing signs of life after a deep freeze.
"We're seeing the end of the ad recession," says UBS Warburg media analyst Leland Westerfield. He's doing a U-turn and forecasting 1% growth this year after earlier predicting a 2% drop.
Last year was the worst for advertising since the Depression. Spending fell 9.8%, reports media tracker CMR.
But on Friday, the Radio Advertising Bureau reported national and local radio ad sales rose 1% in January, stemming a 12-month slide. Spot sales of TV ads are firmer as the industry goes into its "up front" market for ad contracts for next season. While newspaper ad spending fell 9% in 2001, the Newspaper Association of America now cautiously predicts 0.6% growth this year, says Jim Conaghan, vice president of market and business analysis.
And some big marketers are coming off the sidelines now with fresh bucks:
*American Express on Friday began a print and TV campaign worth an estimated $100 million over the next year.
*Burger King and Tropicana are kicking off campaigns for new products. The food chain today launches ads for veggie and chicken Whoppers, two of 14 new products backed by print and TV ads with NBA star Shaquille O'Neal. The juice maker begins ads Sunday on the Oscars to back a new portable bottle.
*Marriott is targeting business travelers with an estimated $15 million campaign timed for the current NCAA basketball tournament and featuring star coaches such as Phil Jackson.
Why spend now? Marriott sees signs business travelers are taking to the road again, says Deborah Fell, head of marketing strategy. "It's a good time to go out there and grab share."
Another lure: Ad prices are a relative bargain. The prices of both Super Bowl and Oscar ads dropped this year. Rates are more "realistic" after years of price increases, notes Jack Myers, editor of Jack Myers Report media newsletter.
Wall Street is pouncing on media stocks in anticipation of a rebound. Big media stocks - Walt Disney, Viacom, AOL Time Warner - were up 2% to 3% Friday. "Media stocks have already outperformed and should continue to outperform in 2002," Westerfield predicts.
Not everyone is ready to party, however. "Things are beginning to look a little better. That reflects advertisers' confidence the economy is improving - and that ad budgets should follow," Myers says. But not quickly - he's sticking with his forecast of a 5.7% drop in 2002.
Consumer trends expert Marian Salzman of Euro RSCG, believes media executives are grasping at any glimmer of hope. The Enron scandal shook consumers' trust, she warns. "Consumers are still waiting for the other shoe to drop. You can't be overly optimistic if you're in touch with reality."
Michael McCarthy, USA TODAY. March 18, 2002
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