As 2008 comes to a close, I felt an obligation to reflect upon the year looking at the highlights and lowlights. I discussed with the Media Works team and together we came up with a list of some of the noteworthy events in the media industry in 2008. Many have significantly impacted the advertising business and others will have residual effects into the New Year.
- Beijing Olympics draw largest ever global TV audience – Thanks primarily to the draw of Michael Phelps and his 8 gold medals, NBC had a huge win with the Olympics this year. Not only did this year’s summer Olympics draw huge viewership in the United States but according to Nielsen, attracted 4.7 billion viewers in comparison to only 3.9 for the Athens games in 2004.
- Resolution of the writer’s strike and its after effects – Though the official end date was early in the year on February 12, networks scrambled to fill in new episodes for spring and develop new programs for the fall, however ratings declined and never recovered.
- Newspaper’s death spiral – Not only are circulations down across the country and papers shutting down, but newspapers also took a hit in their online revenue down 3%.
- Shift of ad dollars from print to online and the explosion of social media– 90% of the top marketers announced they would increase online spending and 78% on social media. 55% reported that budget cuts would spend less on print advertising than they have in the past 3 years.
- Yahoo & Google’s partnership– Not a merger as many contemplated, but really a deal to create more ad revenue for both companies. Yahoo is allowing Google to place ads next to search results and Google is allowing Yahoo access their Adsense technology. The results for our industry…higher prices for advertisers.
- Merger of XM and Sirrius Satellite Radio – making them the 2nd largest radio company in the industry. More packaging options and choices for consumers should lead to growth of the technology but for advertisers no competition could lead to higher pricing and tougher for broadcast radio companies to compete.
- The announcement of Jay Leno moving from late night primetime in 2009 –In an effort to reduce production costs of low rated 10P dramas, NBC schedules Jay Leno for 5 nights a week in 2009 claiming a “DVR proof” solution for advertisers.
- The 2008 Presidential Election – We saw record spending by both candidates but even more significant was Barrack Obama’s marketing campaign strides. He made history by paying millions for a half and hour of paid programming, pre-empting primetime nationally on the major networks and launched the most successful social media campaign using sites such as Facebook, Digg, YouTube and MySpace with an overwhelmingly response from young voters to help him win the presidency.
- GM faces bankruptcy and reduction in ad spending overall – Even if GM receives a bailout from the government GM, one of the top ten advertisers will significantly cut ad budgets continuing into 2009 creating a trickle down decline for the advertising industry.
- The Recession: Outlook for 2009 in the advertising industry grim – When the NBER announced what we already knew on December 1st many predicted that the outlook for 2009 would be slow to improve. Many advertising agencies re-negotiated ad contracts and broadcast buys for 2009, naming their own price. Fitch ratings predict advertising economic weakness to be down near 2001 levels (the worst ad year since 1970) and will continue well into 2010. The outlook is predicted stable for outdoor, cable and online.
“Change” has become the theme of the year, both positive and negative. We look forward to 2009 and we should remain hopeful even if that means remaining stable at best. My personal hope for 2009 is that this country learns from these struggles and is triumphant in reassessing priorities; especially that there are more important things in life than “Britney Spears” who was named by Yahoo and the number one search term of 2008. Happy New Year!