Financial Focus: Madison Avenue Remains Unfocused

Don't expect monster growth in the advertising industry as Madison Avenue lurches into a recovery. According to one top Wall Street analyst, the sector will remain a financial laggard.

Bear Stearns analyst Alexia Quadrani said in a report last week that the advertising industry has lagged in coming out of what has been the worst media recession in the last 50 years. The high-flying holding companies that exhibited so much growth between 1996 and 2000 weren't able to grow as much during the recession.

Quadrani predicts that the next stage will be one of more moderate growth. She predicts that advertising spending will rise about 6 percent in 2004, with holding companies' revenues rising between 9 percent and 10 percent. The drivers will be a better economy and shifts in market share that favor larger companies.

"While this will not quite be the explosive growth seen in the last decade, it will clearly be an improvement over the recent past," she wrote.

A PUBLIC DEBUT: A 132-year-old media company that went public last September passed another milestone in its journey last week--it held its first quarterly earnings call with Wall Street analysts. The rite of passage was duly noted Thursday morning by Stephen J. Smith, chairman and chief executive officer of Journal Communications. The Milwaukee, Wisc.-based company owns 90 newspapers--including flagship Milwaukee Journal-Sentinel--along with 38 radio stations and six TV stations in 11 states.



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