• by Erik Sass , January 23, 2006

It's hard to put a happy gloss on Hurricane Katrina, which ranks among the most destructive storms in American history. But the storm passed, and reconstruction has begun--and that's good news for TV and radio stations in the central Gulf region, which are enjoying a big increase in ad revenue, according to industry analysts at Kagan Research.

"The extra influx of money for construction and insurance, and all the other kinds of things you need for reconstruction, have definitely created a jump in the numbers," said Michael Buckley, a spokesman for Kagan. The central Gulf region is enjoying a 5-year cumulative average growth rate of 7.7 percent, as compared with a rate of only 3.8 percent in the "central South" region further east.

A large part of the central Gulf's increase is also due to sustained growth--unrelated to hurricane repairs--in the booming areas of east Texas, including Dallas, Houston, and Austin. And although these markets are more likely to show sustained gains, the rise in ad spending on the hurricane-impacted areas of the Gulf Coast is more likely a one-time event, according to Buckley.

"It's really an artificial jump," cautioned Buckley, who went on: "If you did the actual numbers from 2005 to 2010, New Orleans and the surrounding areas wouldn't even figure in the top markets." Buckley also noted that "this is just [a measure of] growth rate, not overall ad dollars"--a significant caveat in a market with some of the lowest ad spending in the country.