With Advertising Revenue Down Until 2010, LA Times Sells Soul To Make Ends Meet

Any hopes the media still have concerning advertising revenue can be safely dashed this morning, as ZenithOptimedia, an arm of big advertising group Publicis, has published its annual forecast for the industry: doom with occasional gloomy spells.

They say worldwide ad spending will fall 6.9%, and 8.7% both in the UK and US. Online advertising expenditure will rise, but only by 8.6% compared with the 20% it rose last year; in the UK, online is set to rise by just 2.3%. Meanwhile print ad spending is set to fall 12%. My GCSE in Maths tells me that there’s some kind of shortfall here. 

It’s the kind of environment that’ll see even big media players burn through cash while they come up with new ways of making or saving money; “A number of internet companies that have based their business model on advertising may find their model unsustainable now that credit is drying up”, says the author of the report. But all’s not lost for advertising – Zenith forecasts a bottom to the market this year before a return to overall growth by 2010.

They’re the latest in a series of groups peering into tea leaves and finding them forming the likeness of a crying advertising salesman. Carat published its figures a fortnight ago, telling of a 5.8% global decline; only China was predicted to see their market grow. Group M meanwhile predict a 4.4% drop, and said the US would continue to decline through 2010. They also predicted an 11% drop across UK media. Veronis Suhler Stevenson meanwhile predict a 7.4% decline in US advertising spending.

To try and fight these numbers, the LA Times (who have had some pretty massive problems recently) sold their soul last week for a few advertising clams from NBC – they ran an ad for the TV network on their front page masquerading as a real news story. And in the Sunday paper, they published an advertorial piece about forthcoming Paramount film The Soloist that looked just like a real feature in the arts section. Now their executive editor is calling them “horrible” and “a mistake” – they certainly are, when you’re trying to get new readers to fall in love with your brand and they can’t tell where the LA Times ends and the advertising begins. The public is equipped with a new generation of handheld devices to be eyeballed, so developing smartphone-specific content with astute ads to match is surely the next challenge. Advertising will be profitable again, but prosaic, deceptive methods will mean there won’t be anything left to make profits for.

Posted by Ben Beaumont-Thomas in Creative Economy | April 14, 2009 11:32AM |