The big question following the last few weeks following the enormous swings of the financial markets is this: how bad is it going to be? Michael Burgi, editor-in-chief of Mediaweek posed a number of depressing questions to a panel of media luminaries at the Dow Jones/Nielsen Media and Money Conference. The general answer is yes, things look pretty dark. But the pain will not be equally spread. Emerging markets still look attractive and digital media’s growth will be constrained, but still, the expectation is only slightly.
– Wenda Harris Millard, co-CEO, Martha Stewart Living Omnimedia: Beginning to see a softening in the ad market, a lot of unrest with consumers. “I think they’re confused about what’s going on in the financial markets. Hopefully, there will be some stability in the packaged goods marketers.” There’s been no real long term planning by marketers. Just in time buying in digital, but also in print, which is a challenge.
– John Squires, EVP, Time Inc.: “Magazines tend not to be affected much by downturns, as people tend to stay home. But we’re going to be dealing with a difficult ad market for the next year or longer. Things that have a high emotional connection, whether it’s magazines or the internet, will still retain their high value to consumers and advertisers.”
– Jack Klues, managing partner, Publicis Groupe’s ViviKi: “We’re seeing a measured response, and it varies according to channel. You’re going to see greater emphasis on the growth markets — the BRIC countries — and the more measurable media will continue to show growth. But instead of 23 percent growth, a lot of the forecasters have taken it down a bit. So now we’ll see 20 percent growth, which is still a pretty good number.”
– David Eun, VP, content partnerships, Google: YouTube will benefit from the downturn. Every minute, 13 hours of video are uploaded. “When you think about the ad question, people want to go to where the opportunities. Not only are we measurable, we’re performance-oriented too.” Burgi noted that the ad question hasn’t been completely unlocked. How does that affect *Google’s* plans? Eun: “When TV first came out, all the best practices from other media, such as radio, were applied. We’re not taking the so-called easy money. We’re no replicating the TV model. So we’re pursuing and experimenting with different kinds of ad products. These are the early days. But the opportunity is large.”
– Jessica Reif Cohen, managing director, Merrill Lynch: The Merrill Lynch view is that the first six months was a real estate recession and the last six months were a cap ex recession. “The consumer recession is just starting. We expect this to be long and deep. The stocks tell you a year before. Entertainment companies typically don’t recover until a quarter before a recession is over. Advertising is a lagging indicator as well and typically doesn’t recover until a quarter or two after a recession ends.” More after the jump.
– Broadband, mobile at risk in a downturn?: Eun says no: “People are so used to being attached to their mobile and broadband access, that even as consumers cut back, those are two areas that people can’t live without. Millard: “At a time of uncertainty, the notion of not being connected would cause panic in the streets.” Cohen: “Cable tends to recover faster. And yes, if you are staying home, if you’re unemployed, staying connected is essential. And tough economic times have shown that video penetration grows.”
– Ad revenue: Klues: “I don’t want to sound Pollyannish, but there are opportunites. People don’t change unless they have to. The paradigm that existed when I started in the business is model that is shifting. Clients have more information about their core users. We can take advantage of fragmentation — we call it personalization — and we can move away from CPM mechanics and the broad sweep that has been the traditional model. Eventually, the target will broaden and the media mix will reflect that.”
– Cable ad targeting: Cohen asked what the panel thinks of Canoe Ventures. Klues is enthusiastic, saying it fits into the new paradigm he was just talking about. Targeting, not mass, is king.