Job One: Advertisers' Survival Plan For 2009

Ad-supported media that resists extraordinary change will not bode well in the 2009 recession. The permanent demise of auto dealerships, financial institutions and retailers, as well as the continuing shift of advertisers and consumers to digital platforms, makes for a challenging recovery. A constructive survival plan depends upon heeding and creatively responding to trouble signs.

The problem: consumers aren't spending. Holiday shopping traffic declined 16%, and overall retail sales declined 3% (apparel retailers down as much as 10%), despite deep price discounts, according to preliminary estimates. Consumers are paralyzed by rising unemployment, deteriorating home equity and general uncertainty. Standard & Poor's predicts that a 5% decline in 2009 retail sales will hasten weak profit margins and bankruptcies.

The solution: even cautious consumers spend online. and had record holiday sales (Amazon's busiest order day--Dec. 15--was up 17%), which suggests that consumers want convenience and value. It is surely a lesson for all retailers. Media should work with advertisers to bring more of their business online in new, creative ways.



The problem: auto, financial, retail and real-estate businesses that generate more than half of local media advertising revenues will not recover anytime soon. Some are never coming back. The number of retail store closures in 2009 could exceed last year's 148,000 closures, due mostly to major chains filing for--or trying to avoid-- bankruptcy. Small local businesses are especially under pressure. As many as 3,800 local auto dealerships risk collapse from dwindling sales and credit. The consolidation of investment banks will continue across regional banks. Real estate values and sales will continue to fall. Federal recapitalization, which could boost the deficit to $4 trillion, will occur at the top of the food chain.

The solution: TV, radio stations and newspapers must work more closely with communities and merchants to strengthen local economies. Their survival depends upon on their effective use of digital interactivity. Job one is to connect local consumers with goods and services of choice using location-based marketing on cell phones and Web sites. With thrift the new norm, marketers ranging from Procter & Gamble to Liz Claiborne have learned to monetize the coupon comeback.

The problem: even high-end retailers and consumers are retreating. The devastation on Wall Street has clearly hit the upper class. Advertising by upscale marketers in luxury magazines was down 22% in December from last year--a clear response to more than half of affluent consumers reducing their luxury spending, according to Unity Marketing.

The solution: economist and sometimes actor Ben Stein warns about the paradox of thrift. If we all cut back, we all lose. The majority of spending done by the top 20% of all wage earners also has dramatically slowed. The only hope of spending our way back to prosperity is providing unparalleled quality and consumer relevance. Media and marketers need to create an interactive interface with target consumers.

The problem: ad agencies suffer from the same costly legacy as media companies and advertising clients. Omnicom Group, Publicis Groupe, WPP PLC and their smaller units are collectively slashing thousands of jobs. The only meaningful change must be structural.

The solution: take a uniformly digital approach to measurable brand marketing. That means more virtual production, interactive coupons, location marketing and making target consumers an ongoing part of the experience. Engage consumers to be participants in real-time marketing research and product development. Digital should be the foundation of all client plans, with traditional media reduced to one of many components. If 2008 taught us anything, it is that even Google's most brilliant algorithms and even the most popular 30-second TV commercials on video Web sites like do not guarantee online ad prosperity.

The problem: It could be worse than expected for awhile. Worst-case estimates call for overall U.S. ad spending to sink as much as 9%, with television and newspapers falling at least another 13%. ZenithOptimedia expects U.S. ad spending to drop 6.2% in 2009 to $161.8 billion; WPP's agency GroupM sees a decline of 3% to $157 billion. Global ad spending is expected to be flat or to decline slightly in 2009. Fitch Ratings sees the downturn extending into 2010. Ad spending declines have become more demonstrative--occurring only for the third time since the end of World War II, because advertising and marketing won't ever be the same again.

The solution: do not predict the results of this recession based on past economic downturns. This malaise is far different; the Internet and digital options provide competitive alternative platforms that will prevail. The long-term change in advertising categories will be profound, and in some cases, permanent. The fact that television has fared well in prior recessions is meaningless; today you can watch television content at will on the Internet. That said, Bernstein Research expects TV advertising to fall at least another 5% to about $65 billion this year. An anticipated 5% increase in online ad spending in 2009 (compared with 16% growth in 2008) will not offset the continuing freefall in newspaper, television and radio ad spending.

The problem: even digital ad platforms will have their limits. Domestic ad spending on social networks now is expected at $1.3 billion in 2009, lower than eMarketer's original $1.8 billion estimate and just above last year's $1.2 billion. Domestic online video ad spending should grow 45% to $850 million in 2009. Watching every penny spent means that advertisers are as cautious about new media as they are about old media.

The solution: although social network spending is only about 5% of the overall $24 billion online ad dollars (MySpace generated about $600 million in ad revenues and Facebook about $200 million in 2008), it represents more promising engagement marketing and interactive revenues. Social networking and online video advertising need to become scalable--the catalyst for reinventing marketer-consumer relations. This will occur around games and continuing dialogue, contests and mobile applications, and new secure online currency and transactions. As pricing of traditional media contracts, it moves closer to new online ad spending; parity will bring more uniform, integrated ad spending in better times.

Diane Mermigas' "On Media" column will appear every Monday in MediaPost's Media News Daily. She can be reached at or 708-352-5849.

4 comments about "Job One: Advertisers' Survival Plan For 2009 ".
Check to receive email when comments are posted.
  1. Jim Dugan from PipPops LLC, January 5, 2009 at 7:56 a.m.

    As part of the solution, interactive coupons and offers are here to stay for a long while.

    MOBILE INTERACTIVE eCOUPONS are even better because they're always with us. is the BEST because it combines the interactivity with a barcoded eCoupon AND INSTANT SAVINGS AT THE POINT OF PURCHASE, allowing the consumers to always know what's available and where and when, specifically, while they're on the go.

    It's paperless and the advertisers publishing on the site have our backs with respect to their offers.

    They're not just relying on us to happen to have to take the time to go their website to see if there's something new.

    They're making it easier on us and that's one thing we like, for sure.

    Being able to go to one mobile site while we're on the go is a solution that any advertiser will want to employ encouraging our engagement in that last half a second while we're making a decision.

    Advertisers have complete control of their ad campaigns with click to call, images, videos and more, can make changes at will, and gain instant intelligence as to consumers' views and redemptions like no other media.

    It's cheaper, faster than any other type of media, and advertisers will find that they KNOW EXACTLY where every advertising dollar is being used and how much each dollar returns!

    So, Users, Grip your mobi and find out about all of the Offers!

    Advertisers - Get A Grip!

  2. Robert Rosenthal from Rosenthal Heavy Industries, January 5, 2009 at 9:16 a.m.

    Digital + TV = iTV. Savvy marketers (Unilever) already exploiting technology successfully.
    Rob "vested interest" Rosenthal

  3. Clinton Gallagher, January 5, 2009 at 11:19 a.m.

    I am predicting February 17th will go down in history as the Great Blow Smoke Up Your Chimney Day as the licensed fascists extend their over-the-air broadcast oligopolies to the ~250 million TV sets in America in an attempt to take over and dominate all digital media transported using Internet Protocols. Who has not heard their obnoxious reminders "informing" everybody that the fascists are "required" to begin broadcast digitally albiet that spiel being half the story of what is occurring?

    The TV, the microcomputer, the digital telephony devices, digital signs and in general all types of concumer electronics have converged into one and the same type of device capable of sending and receiving digital media; the key phrase being "capable of."

    The 2009 Consumer Electronics Show will reveal the broader agenda of the TV manufacturers. We already know several of the big names have announced some of their current TV sets as well as future products will be made "internet ready." We also know Samsung for example has a model which is "Internet ready" right now except for one thing; the person who has paid thousands of dollars for such a "TV" can't change the Internet "channel" and --must-- receive whatever digital media Samsung has decided to approve for use on "their" TV sets.

    Whether all other TV manufacturers are going to continue to manufacture and sell closed and proprietary TV sets only able to be used to passively receive media from the licensed fascists remains to be seen.

    2009 can become the year of Interactive TV creating new markets, new businesses and millions of new jobs or 2009 will mark the year leaving no question that fascist licensing will continue to be used to determine who can and who cannot work in America, the land of the what?

  4. Deborah Graybosch from DigitDoes, June 22, 2009 at 9:46 p.m.

    The age of the on-line "prosumer" is here to stay. Prosumers are savvy, knowledgeable, trendy and like to be in the driver's seat. They are letting companies and marketers alike know exactly what they need, want, prefer and care about. The question is whether companies are listening and flexible enough to respond alike. The economic crisis is a crisis of faith as much as money. We are a generation of active participants and judges. To be succcessful in this economic environment you need to listen to us and you need to listen carefully not only to what we are saying but what we are doing when we are saying it.... Maybe that's why Twitter is such a success.....The answer to something as simple as "What are you doing right now?" is what marketers and companies need to be striving to understand. Staying ahead of the curve means tapping into this very dynamic and fluid on-line community of "prosumers". People are very busy living their lives. Mobile marketing will reach the prosumer while they are busy doing what it is they do as they go about living their lives. Companies need to make sure they are reviewing the key words and presenting their products in the media rich context that prosumers have come to expect. Educate the prosumer on your product, brand it to the right community/audience and provide value (coupons and promotion savings, on-line ordering convenience, reasonable upgrade offerings, an e-commerce platform that is easy to use), post customer reviews and your company's mission statement, be a good corporate citizen, clearly state product guarantees and be fair. Communicate these values clearly and you will ride the tide of this downturn well.

Next story loading loading..