Market Focus: New Orleans, Report Reveals Profound Shifts

Hurricane Katrina may have devastated the media marketplace in the Gulf region, but a new report signals some bright spots for the most affected market: New Orleans.

Without question, the overall media outlook remains bleak, as a large number of the market's population have resettled in other parts of the country, with no apparent plans to come back. According to a recent report by Brown University, up to 80 percent of New Orleans' African American population may never return. Now a study from Louisiana-based consultant Zehnder Communications shows just have severe the depopulation has been for some key parishes: "Orleans decreased from 460,000 to 100,000," while "St. Bernard decreased from 67,000 to 7,000," the report reveals.

One embittered evacuee, Shamekeia Marshall, is typical. A former security guard for the Louisiana Supreme Court, Marshall said she plans to stay in Helena, AK, with her two young children: "I'm never going back to New Orleans, not after [being in] the Superdome." Marshall cited the demeaning treatment meted out to her family there, and her fear that "it will happen again" as reasons for staying away.

Between the depopulation of the city, the destruction of consumer electronics by floodwaters, and delays in repairs to the electric grid, the pool of potential television viewers has fallen dramatically, according to the Zehnder study: "The television viewing audience in the New Orleans market was estimated to have decreased from 1.6 million to 1 million following Hurricane Katrina."

Meanwhile, television ratings measurement also took a hit, with Nielsen currently saying that it will withhold numbers until November, 2006.

As it stands now, Nielsen has lost touch with 195 of 415 original Nielsen families, and of the remaining 220, the homes of 35 were totally destroyed by the hurricane--meaning that Nielsen is perilously close to its minimum sample size of 180 households. Disruptions to electrical and phone service combine to make accurate measurement impossible.

But there have also been some surprising upswings in certain sectors, as reflected in a survey by Kagan Research showing increased demand for advertising sales in the Central Gulf region. Michael Buckley, a researcher for Kagan, attributed the increase to "the extra influx of money for construction and insurance, and all the other kinds of things you need for reconstruction."

According to Kagan, the central Gulf region overall is enjoying a 5-year cumulative average growth rate of 7.7 percent in advertising sales, as compared with 3.8 percent in the "central South" region further east.

Radio advertising in particular has enjoyed increased demand for ad sales in the New Orleans region, according to Zehnder's report, which cites more commuters driving into the city from temporary residences outside, as well as increased congestion and longer drive times caused by infrastructure damage and repairs.

As widely predicted, New Orleans' bust has created a boom for nearby Baton Rouge. The city's population experienced a temporary increase of 250,000 and a likely permanent increase of 50,000, according to Zehnder, with home sales rising 22 percent and the creation of perhaps 30,000 new jobs.

The daily circulation of the Baton Rouge Advocate increased from 91,000 to 106,000, while demand for radio ads grew for the same reasons cited in New Orleans, although prices have settled down to around previous levels.

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