• by Erik Sass  @eriksass1, December 11, 2009

Although it's still premature to call it, the economy appeared to take tentative steps toward a long, slow recovery in the third quarter of 2009, when the U.S. gross domestic product grew at an annualized rate of 2.8%, according to the Bureau of Economic Analysis.

This expansion followed four straight quarters of declines and was accompanied by signs that the real estate and job markets were finally bottoming out. However, the uptick did not translate into good news for media, as advertisers took a conservative approach and kept their purse strings tied tight.

The fourth quarter isn't looking a whole lot better. As in previous quarters, the bad news in the third quarter was spread across all media -- albeit unevenly -- as some sectors were hit harder than others.

Broadcast and cable TV revenues continued a long slump, with a total decline of 12.1% in the first nine months of 2009 compared to the same period last year, according to TNS Media Intelligence. The losses were led by network TV (down 11.5%, versus just 2.9% for cable).

CBS ad revenues fell 5.5% to $1 billion, and ABC's total ad revenues slipped a comparable amount. Looking to the fourth quarter, things may improve somewhat, but no one will be breaking out the champagne come New Year's -- especially at NBC, where total broadcast ad revenues are supposed to drop 22.3% for the full year 2009, from $4.5 billion to $3.5 billion.

Other traditional media fared worse. Total radio advertising revenue tumbled 16% to $4.15 billion, making it the 10th consecutive quarter to see total revenues decline, according to the Radio Advertising Bureau. For the year-to-date, total radio ad revenues are down 21% to $11.57 billion.

As with broadcast TV, there may be moderate improvement in the fourth quarter, but the industry is still looking pretty sickly. In discussing their third-quarter earnings, most radio bosses were circumspect about the prospects for recovery in the near term, citing "limited visibility" and continuing economic uncertainty.

The positive GDP results seemed to be taking place in a different universe from print. Newspapers continued their long, seemingly inexorable decline in the third quarter with a 28% drop in total ad revenues, according to the Newspaper Association of America, from $8.94 billion to $6.44 billion -- marking the 13th straight quarter of revenue declines.

National ad revenues dropped 30%, dipping below $1 billion for the first time since 1995, while retail slipped 24% and classifieds plunged 38%.

Consumer magazines turned in similar numbers, with total ad pages plummeting 26.7% in the third quarter, making 10 straight quarters of declines, according to the Publishers Information Bureau. Since then, figures for monthly magazines from the Media Industry Newsletter suggest the fourth quarter has brought no relief, with monthly declines of 20.1% in October and 19% in November.

As in previous quarters, Internet advertising fared better than most of the remaining traditional media. According to the Interactive Advertising Bureau, total Internet ad revenues decreased 5.4% compared to the third quarter of 2008, to $5.5 billion. The relatively shallow decline holds out hope of a bigger rebound once the recovery reaches the advertising business -- whenever that may be.

The overall disparity between advertising results and GDP in the third quarter is not surprising in light of historical data on the behavior of ad revenues during past recessions. Typically, ad revenue trends have anticipated economic slumps, with declines in ad revenue beginning up to a year before drops in GDP. Usually, they also lagged behind during times of recovery.

However, a comparison of historical data with ad revenues (and ad pages) during the current recession does give more reason to worry for radio, newspapers and magazines.

Unlike previous recessions, all three were showing signs of trouble well before GDP headed south in the fourth quarter of 2007, suggesting that they are also suffering the effects of long-term structural shifts in advertising -- chiefly the migration of many advertisers to the Internet.