• by Paul Gough , March 10, 2003

With another report in hand showing signs of strength, the media economy’s heading into the TV upfront season with plenty of promise. But with the rest of the economy still down in the dumps, why isn’t the ad market slower?

CMR/TNS Media Intelligence said Monday that total ad expenditures grew 4.2% to $117.3 billion in 2002, with strong gains in network and spot TV, Spanish-language TV, network and spot radio and local newspapers. Losers included business-to-business magazines and Internet spending.

In past recessions, ad spending’s been the first to take a hit. Companies worried about cash flow to advertising. But this time around, it’s been different.

“The state of the economy is dreary and yet the media marketplace is quite strong,” said Bonnie Barest, EVP/managing director at Optimedia.

She points to this year’s $8 billion upfront, which held well with few cancellations and a robust scatter pricing. With not that much new inventory, broadcast was sold out and more advertising shifted to cable.

The restraints that have held advertising in check in previous recessions don’t apply in 2003. It’s all about fighting for market share, said Brad Adgate, Horizon Media’s director of research.

“It’s a different world, it’s more competitive. There are a lot more product categories,” Adgate said.

Adgate said it takes more of a network buy to get the reach you once did, thanks to erosion of share.

Using advertising to gain share when your competitors aren’t in the market is nothing new. Kellogg used advertising in its fight against Post during the Great Depression of the 1930s. But there are many more products fighting for more share today: Consumer electronics, new technology, entertainment, automotive, telecom. And there’s more media vying for consumers’ attention.

Barest notes that with dozens of new automobile models being introduced this year, they’ve got to be introduced with advertising. And the battle between telecom companies is as strong as ever.

Adgate said advertisers today want to keep their messages in front of viewers, lest a competitor gets there sooner and more often.

“Brands have been built on recessions, taking advantage of the fact that others aren’t spending,” said Robert Davidman, CEO of New York-based EarthQuake Media.

“Right now, everything’s booking,” he said. There isn’t a lot of remnant space on the networks, which is good for the media outlets but decidedly bad for advertisers who want it.

“The marketplace is definitely healthier than it was. People are still spending, but I think that could change. It’s hard to predict really far ahead in the future because people are so wary of what’s happening,” Davidman said.

Davidman said that even though there’s a recession, advertisers are still spending because consumers are still spending.

“At the end of the day, we’re still consumers and we’re still making purchases, buying food and still going from Point A to Point B,” he said.

Even small- and medium-sized businesses are advertising because it’s crucial to get the word out about their products and services, because they have to stay in business, too.

CMR president Steven Fredericks said the growth reflected a strong network upfront, elections advertising and holiday spending.

“Despite geopolitical and economic uncertainties, the marketplace outperformed our expectations for the year,” said Fredericks.