The Enduring Power of "Old Media"

There is lots of excitement about social media and increases in spending on online display and search advertising—especially as a means for growing new brands and maintaining sales of established brands in this most difficult year. But in the rush to embrace “new media,” there seems to be an almost obscene push to discount the strength of old media, especially as it involves print and TV. Certainly newspapers seem to be in a free-fall this year, and many leading consumer print titles are showing major advertising drops. But that doesn’t mean old media has completely lost its punch.

If new media can be said to command 15% or so of U.S. media spend this year, that still leaves 85% of a $260 billion or $160 billion pie—depending on your methodology –- devoted to building brands the old-fashioned way.

It’s hard to be specific about where things stand, because someone has moved the goalposts. Usually at this time of year, the industry depends on Interpublic’s venerable director of forecasting Bob Coen to call the field. But Coen has just retired and his successor at Interpublic’s Magna unit, Brian Weiser, has changed the way Magna is going to keep score.

In the shorthand of media forecasting, Weiser says he’s going to use a deductive “top down” methodology, based on reported revenues of media companies and other factors; whereas Coen used a so-called “bottoms-up” methodology, that projected volume based on spending estimates and rate cards.

As result, whereas Coen was forecasting a $258.7 billion U.S. media spend in 2009, Weiser predicts it will finish at $161.0 billion. That’s a decline of almost a third. But using Weiser’s methodology for the entire year, declines within some categories are much more modest. While Weiser said online spending would come in at $23 billion, a drop of 2%, he still forecasts magazines at $16 billion, national TV $32 billion; local TV $15 billion; radio $14 billion and so on. Overall he says spending will be down due to the slowdown in the economy and some marketers need to slash costs, but actual declines for TV will be only 14%, and should expand on an average annual basis through 2014. According to Joe Mandese in Mediapost.com, “Weiser said the U.S. ad economy declined 18% during the first and second quarters of 2009, but expects conditions to improve during the second half of this year, leading to an aggregate decline of 14.5%.” And the turn-around is supposed to come in 2010, when indicators for many traditional media categories (but not newspapers) are headed north.

Net-net: If I were a marketer looking to learn how to capitalize on the growing interest in social and online media, I might set aside a quarter of my budget for new media placements—but I’d still count on old media to be an underlying driver of my business.

Reports of the death of TV and magazines are, in the words of Mark Twain, greatly exaggerated.