• by Michael Kubin , December 20, 2000

By Michael Kubin, Co-CEO, Leading Web Advertisers

These past twelve months have certainly seen their share of ups and downs: from the Y2K scare at the beginning of the year, through the first quarter stock market euphoria, to the mid-year market crash, and most recently talk turning to recession. Or at least the possibility of a recession.

And while recessions are never pleasant, at least their consequences to the media world are relatively predictable. Here are some media experiences from recessions past:

1. Network television is usually the bellwether. It leads all other media in softening, and drags other media (especially network cable and spot television) along with it. (Incidentally, in case you've been living under a rock, network television prices have been stunningly soft of late.)

2. Quarterly price seasonality becomes exaggerated. First and third quarters, generally low in price due to low advertiser demand, drop much further than normal. This represents an excellent buying opportunity for non-seasonal marketers who can take advantage of advertising in down quarters.

3. The buying community typically supports the strongest media players in each segment. The big guys have more price flexibility, and they generally use it in a down market to gain market share. Marginal media players get killed. Marketers are strongly advised to negotiate with the market leaders first; price drops will be more favorable and everyone else will be forced to follow suit.

4. Direct response does VERY well. Most media have inventory left to spare, and the best way to realize revenue from it is to sell it on a direct response basis. This represents one of the best buying opportunities in a down economy, and marketers would be advised to explore ways in which to make direct response (television, cable, radio, FSIs) work for them.

5. Opportunistic buys are much more available. Typically, an advertiser is well advised to hold back 10-15% of his budget for last-minute opportunistic or 'stale bread' buys. In a recession, a better number would be 15-25% since bargains always come up and sellers are eager to pull cash in. Opportunistic buying takes discipline on the part of the buying agency; marketers would be wise to investigate and assess their agency's skills in that area.

6. Media is among the first industries to recover from recessions, and the recovery is usually FAST. From a buying standpoint, that requires staying very alert to the inevitable market bounce. Missing a market buy just a few days can be disastrous as conditions often go from wide open to oversold in a hurry.

If there is a consensus among economists, it appears to point to a relatively benign and short-lived economic slowdown. Let's just hope we don't see that last line listed under "famous last words."

- Michael Kubin is co-CEO of New York-based Leading Web Advertisers (LWA) -http://www.web-advertisers.com - a comprehensive Web advertisement monitorin