Back from Happyclappyland: A DIY guide to calculating ad declines

 

OK, so perhaps I was a bit harsh on the forecasters from Group M yesterday.

They’re just doing their jobs, trying to stop people from thinking that the world has come to an end. I really should try to be more cheerful.

Perhaps, as Group M suggests, ad revenues for consumer magazines will only decline by 8% next year. Indeed, this morning brought news of Robert Thomson suggesting that advertisers are returning to the Wall Street Journal.

Except that. . . I remember back to the days after the dot.com bust in 2000. As the crash got underway, there were plenty of flase dawns in tech publishing (where I happened to work at the time).

Next month was always going to be the month when the bleeding stopped. This recurrent optimism turned into everyone’s worst enemy.

Perhaps this is inevitable in a recession, something that’s simply built in to the downward spiral. Anyone coping with similar circumstances today has my sympathy. It’s horrible.

So perhaps I was less irritated less yesterday by Group M’s figures than the Guardian’s happyclappy headline (”UK ad spend to fall 6% in 2009.”).

As it happens, Mark Sweney’s piece filled in some of the blank mental spaces created by those words. And the excellent Arif Durrani offered a stern view of the numbers at Media Week.

It’s wrong to harp on about a dodgy headline, I know. But I’ve had my fill of single-digit decline projections. They really don’t reflect the reality for most media folk. As such, they’re starting to get seriously irritating.

Footnote: Mary Meeker, an analyst at Morgan Stanley in New York, has given us the wherewithal to construct our own ad spend forecasts.

Slide 15 (reproduced at the top of this post) from a recent presentation by Meeker offers a template for calculating ad spend declines from declines in US GDP. Things probably aren’t much different in the UK.

According to one estimate, real GDP contracted by 2.1% in the UK during Q3. You can use Meeker’s numbers to draw your own conclusions about the resulting effect on overall ad spend.

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