View all newsletters
Sign up for our free email newsletters

Fighting for quality news media in the digital age.

  1. News
December 5, 2008

Adventures with WPP in Happyclappyland

By Peter Kirwan

WPP’s media buying subsidiary Group M churned out yet another forecast for advertising growth today. (On top of the existing ones from Zenithoptimedia, Billets and Enders.)

This being WPP, the tone is less doom-laden than Enders. But it seems more gloomy than Zenithoptimedia and Billets. 

2009:
TV advertising: -6%
Radio ads: -8%
Consumer magazines: -8.5%
National newspaper advertising: -12%
Regional press: down 13%
B2B magazines: -14%

With one or two exceptions, which we’ll come to in a minute, Group M is broadly predicting that 2009 will see ad revenue declines that resemble those of 2008. Here’s what they’re predicting for this year:

2008:
TV advertising: -5.8%
Radio ads: -9%
Consumer magazines: -7.6%
National newspaper advertising: -8.6%
Regional press: -19.1%
B2B magazines: -8% 

Traditionally, forecasters have used GDP growth figures to predict growth and decline in ad spend.

I suspect Group M is doing exactly this. The assumption behind Group M’s numbers for 2009 is fairly obvious: they’re clearly betting on a nice, sharp, recovery in GDP during 2H09. With a little help from easier YOY comparisons, of course.

Content from our partners
MHP Group's 30 To Watch awards for young journalists open for entries
How PA Media is helping newspapers make the digital transition
Publishing on the open web is broken, how generative AI could help fix it

That’s why regional press gets allocated a smaller decline next year than in 2008. The sector was first into recession, so it will be first out. Similarly, Group M is expecting revenue declines to deepen next year at the nationals, who lag behind regionals in the business cycle.

I can buy the bit of Group M’s logic that deals with timing. What I can’t buy is that assumption about a quick economic recovery in 2H09.

Every commentator in town laughed at Alastair Darling’s rosy predictions of recovery in the pre-budget statement a few weeks ago.

But even Darling predicted GDP decline of 0.8% during 2008 — and a performance that will almost certainly be worse in 2009 (down by 0.75%-1.25%). 

Presumably, Group M has pegged its expectations for GDP next year somewhere near to Darling’s most optimistic dreams for 2009 (ie: down by 0.75%).

I don’t buy this deliriously contented scenario. Nor, I suspect, will publishers – particularly not those who encounter this bit of ancillary smugness, flogged to Media Week by Group M:

Despite this, GroupM does not expect to see mass closures within the 1,300 free and paid-for regional titles, as publisher margins have not collapsed. The report predicts closures might be confined to the weakest 2%, or some 26 newspapers.

Margins haven’t collapsed? Perhaps not entirely. But try telling that to the several hundred regional journalists who have lost their jobs since July.

As for a suggested total cull of 26 local newspapers, perhaps Group M might care to consult with the NUJ, which reported on Monday that more than 30 local newspaper offices and ’50-plus titles’have been closed since June.

Sure, the NUJ’s figures might include a bit of puffery. But less than six months into recession, they still make Group M’s prediction look absurd.

As for the question posed in the headline, the answer should be obvious by now. If nothing else, forecasts like these from the big agencies look uncomfortably like a licence to continue battering down yields toward extinction.

One way or another, this generates short-term profits for agencies.

In the background, behind the deliriously happy forecasters, you can just about make out a bunch of ad buyers clutching copies of Group M’s report.

Standing above the prisoner on the rack, they’re murmuring in unison: “Oh, come on — it’s not really hurting that much, is it?”

Topics in this article :

Email pged@pressgazette.co.uk to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog

Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network