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Are We at a "V" or a "W", and Where Does Advertising Fit?

By John Shelton November 02, 2009 | 6:14pm

We are at a point in the recession where everyone is wondering:  Are things better?  In the economic cycle, are we going to have a “V” recovery or are we partway through a “W”?  There are different parts of a recession – we just need to figure out which part we are in right now. Stocks are going up, but home buying and employment continues to go down.  What about advertising?  I look at advertising much like housing right now - near the bottom.  Our recent survey points that out as well.  In our third quarter survey of media buying agencies, over one third of the respondents thought their growth for the rest of the year would remain stagnant.  One difference between advertising and housing is that the lowest priced housing is hurting.  Higher priced housing is showing a little rebound.  The reverse is true in advertising.  The lower priced advertising is rebounding while higher priced advertising continues to decline.  Our survey showed a strong resurgence of Spot Radio advertising, an avenue that can be produced and placed cheaper.  Spot Television which has been the leader has dropped by 42% in agency customer focus and barely holds onto the lead.  In our fourth quarter survey in 2008, barely anyone said that their clients were more focused on Spot Radio.  In this latest survey, we witnessed an amazing 700% increase in those who were focused on Spot Radio most.  It is just behind Spot TV and Internet as the top avenue choices.  So as we see other areas of the economy improve (we did see that a third of our survey respondents felt their business was better than at this point last year), I will be curious to see how long the trend of more affordable advertising like Spot Radio remains near the forefront.

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