With the majority of major media owners and agency groups reporting revenue and profit growth for the first half of 2010, is it appropriate to declare the industry ‘out of recession’? The turnaround reflects advertising growth - at the heart of which is television.
Over the past few years some commentators have predicted the demise of TV as an advertising medium. While believing that over-stated in the near-term, I consider it dangerous to conclude the recent rebound pulls TV ‘out of the woods’.
After all, growth rates in the first half 2010 are compared with appalling performances in 2009. It is also possible that as brands have returned to spending, they have turned to TV first as the tried-and-tested way of making an impact. Let’s face it, it does remain difficult to spend significant amounts of money on digital in the short-term. If logic is followed, the rate of growth in TV spending will slow and digital spending will increase more steadily over the rest of the year.
At the start of the recession, it was clear the media industry was going to be different at the end of it.
So what, if anything, has been learnt? In search of perceived better value the consumer sought cheaper digital alternatives. They remained loyal to content but used new devices to explore new options. Business collaboration became more accepted as a way of developing and exploiting revenue opportunities or sharing risk. Costs needed to be aligned with growth potential by streamlining areas of slowest growth while investing in others. Businesses in some of the fastest growing markets (for example, India) were forced to re-evaluate overly optimistic business plans and to inject more reality.
It is not yet clear if these lessons have been learnt.
This article was originally published in the October 2010 issue of Campaign Asia-Pacific.