Wells Fargo Securities analyst Marci Ryvicker reports that her channel checks suggest that “a muted ad recovery is underway.” She sees the greatest sequential improvement for radio, although pricing is still down a lot, followed by TV and outdoor.
“We have spoken with several private and public local media groups (outdoor, radio and television) as well as various media buyers. Most have confirmed that September is showing some incremental improvement but the overall tone remains cautious. Radio is experiencing the greatest sequential improvement, followed by television (networks more than stations) and lastly outdoor,” Ryvicker said in a note to clients.
Cash for Clunkers brought in some increment cash, Ryvicker said, but had the most impact in larger markets. She noted that the majority of her contacts said auto advertisers were mostly repeat customers who just changed ad copy for the promotion, rather than spending more money, although there were notable exceptions. “Given the steep declines in auto advertising over the past few years, it sounds like this ad category has hit bottom,” she said.
As for trends:
–“Radio companies sounded the most optimistic (still cautious), with pacings continuing to strengthen week after week. Media buyers suggest that radio may look better than television on a relative basis given that the latter has significant political comps. While demand is improving, price is still down significantly (more so in larger than in smaller markets).”
–“Television groups face difficult H2 comps given significant political. Pricing in television has not recovered, and pacings are skewed by the difficult political comps from last year’s presidential election. While most groups sounded relatively optimistic about Q4 given what they are hearing from their general managers, these trends have not yet materialized in the pacing data. It sounds like the focus will soon be 2010, with significant political, Superbowl (CBS) and Olympic revenue.”
–“Outdoor is experiencing the most muted recovery. We spoke with various outdoor groups who have confirmed that pricing has not yet stabilized. Comps do get easier but a true organic recovery is not expected until H1 (more Q2 than Q1). Large markets are suffering from much larger discounts (50%) than small and midsize markets – better for LAMR than CBS. International trends have stabilized. In general, outdoor is experiencing the slowest rebound.”
RBR/TVBR observation: Even a weak recovery is good news after this long and painful recession. Let’s hope it holds. We’re also hearing anecdotal evidence of modest improvement, but nothing yet to get very excited about.