Ad recession: We're at the end of the beginning, not the beginning of the end

Writing in the FT, Tim Bradshaw predicts that ITV’s forecast 20% YOY decline in September ad bookings might come to be seen as “the moment the credit crisis finally hit advertising budgets”.

This is unlikely. The credit crisis was taking a visible toll on ad expenditure as long ago as January. But in ad markets, as in property markets, the real point of impact was early May.

That’s when the decline in ad revenues moved aggressively into double-digit territory. The scale of the collapse is really visible in the numbers for Newsquest’s classified ad revenues provided in monthly bulletins issued by Gannett.

In April, Newsquest was dealing with a classified market that fell by 5.7%. During May, its classifieds were down 14.7%. (At Trinity Mirror, the Q2 decline seems to have been similarly sharp; at Northcliffe, less so.)

Since then, we’ve moved up another gear. Last week, Trinity Mirror disclosed that ad revenues at its regionals declined by 17% during June.

That’s actually worse than ITV’s prediction for September. Why? Because ITV is comparing its performance with a buoyant September 2007, which featured England reaching the Rugby World Cup final.

Strip out the effects of that, and, as ITV’s Rupert Howell notes, the channel’s underlying YOY decline in September will be something like 14%-15%.

This feels about right. When it comes to percentage declines, the big ad budgets devoted to commercial TV are always going to lag behind what’s happening in the regional press. The smaller local businesses that sit at the economy’s sharp end always feel the pinch first.

So that we can all keep a sense of proportion, here are a few data points that illustrate the speed and scale of the downturn.

The percentages refer to all ad revenues including digital (or in the case of Newsquest, to classified revenues only, where mentioned). The months mentioned are those in which the declines actually occurred (rather than when they were reported to the market by the companies in question). All % comparisons are year-on-year. . .

July:
Trinity Mirror regionals: down by “around” 17%
Trinity Mirror nationals down by “around” 13%

June:
Newsquest classifieds: down 19.3%
Northcliffe regionals: down 16%

May-June:
Trinity Mirror regionals: down 11.3%
Trinity Mirror nationals: down 13.2%

May:
Newsquest classifieds: down 14.7%
Northcliffe regionals: down 12%

April:
Newsquest classifieds: down 5.7%

March-June:
Associated Newspapers: down by 3%
Northcliffe regionals: down by 11%

March-April:

Trinity Mirror regionals: down 3.3%
Trinity Mirror nationals: down 2.4%
Northcliffe regionals: down 6.7%

January-April:

Trinity Mirror regionals: down 3.1%
Johnston Press: down 7.1%

January-February:

Johnston Press: down by 4.2%

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