Local advertising on the rebound
Traditional media — television, radio, newspapers, outdoor — are seeing a bounce in advertising, especially from local companies. Solid business practices and client relations are bolstering this positive trend, according to media executives.
“Two-thousand-eight was bad, 2009 was awful! This year is getting much better,” said Jeff Green, KVOA general sales manager. Historically, a large share of KVOA’s business came from national and regional advertisers — up to 80 percent. Now KVOA’s advertising sales are split at about 50 percent national/regional and 50 percent local.
Radio trends are similar.
“Two-thousand-six was a monster year: We had a lot of political advertising, real estate was booming, and banks were heavy advertisers. Then 2007 slowed down a bit; 2008 was a pretty good year; and 2009 was the most dramatic — I think the market was down 23-24 percent. I’d say that in 2010 we’re going to get about half back,” said Ken Kowalcheck, general manager of Citadel Broadcasting.
“Right now, we are doing pretty good,” said Kowalcheck. “The first quarter is up — in the low double digits. Going into the second quarter, it looks like the same percentage of growth.”
On the print side, Lee Enterprises, which owns The Arizona Daily Star and 48 other daily newspapers, reported in February that its year-over-year trend in advertising revenue improved for the fifth month in a row, according to press materials. Carl Schmidt, Lee’s vice president, chief financial officer and treasurer, predicted the improvement would continue into the spring.
At least one outdoor medium expects growth this year, too.
“Currently, we are up 20 percent over last year in the first quarter and expect to have 7-10 percent growth over the next few quarters, year to date,” said Dee Anne Thomas, director of sales for AdVision, which offers space on bus benches and shelters.
Several industry categories are re-emerging:
- The auto industry, which cut back over the past two years, is making commitments close to what they were before, said Green. Much of the auto increase is from “Tier 2” advertising, placed by dealer associations and cooperatives.
- Local housing, home improvement, carpet and furniture advertising is starting to move forward.
- Fast food is advertising its new products.
Not business as usual
Businesses that weathered the economic storm are those with good, strong business practices, according to Green.
“Those who have stayed focused on their mission and customers are still here and getting stronger now.”
KVOA-TV revised its business model about six years ago because “it was the right way to do our business,” said Green. “We went from a ‘we’ve got the highest ratings so we get the highest rates’ to a consultative approach. KVOA identifies clients’ needs, goals and expectations and matches them to KVOA products and services.
“As a result, we have advertisers on our air now and who have continued with us through the last two tough years that are getting results and are now able to expand their advertising,” said Green.
Citadel helped with its clients stay afloat.
“We knew if our advertisers could make it through 2009, then we’d all be in good shape in 2010,” said Kowalcheck. Citadel carried some advertisers’ receivables longer than normal and worked out payment plans.
“We felt this was the only way to do business in those tough times, Kowalcheck said. “By staying in touch with our clients and listening to what they were going through, when all was said and done, we only felt the necessity to take one client in all of 2009 to collections.”
Contrary to broadcast, 2009 was better for AdVision than 2008.
“We believe that our strategy and the economy have worked for us,” said Thomas. AdVision kept its products affordable. Advertisers no longer able to afford a good billboard showing looked to bus benches and shelters for outdoor advertising.
AdVision also takes a consultative approach, similar to KVOA’s. “We help local advertisers with their message. We ask them what kind of expectations they have with their advertising commitment, and we make suggestions that will help them reach their expectations,” said Thomas.
We’ve seen more offers and price points on ads,” she said.
With the political season on the horizon — and contested gubernatorial and congressional races — the first-quarter bounce should continue into the fall.
(Thanks to Wookiee for the photo)
Contact us for help communicating with your stakeholders, managing this crisis, or preparing your business contingency plan.