Advertising mutates

Michael Hedges March 16, 2009 Follow on Twitter

We’ve been wondering and sometimes worrying about the immediate future of advertising. Web advertising is slowing, other media dropping. Broadcasters can’t find visibility. The advertising people, though, see a new world.

The final results for 2008 ad spending in France were released by IREP and FrancePub (March 11). “Crisis” was the most often used description as spending fell 2.2% over 2007 to €11.4 billion. Free newspaper advertising dropped the most, 6.7% to €1.1 billion. Television was next, a 4.5% drop to €3.3 billion. Radio advertising was off 3.2% to €743 million. All print was down from 2007 by 3.7% to €4.6 billion.

French regional newspapers managed to hold their own against the tide, gaining 1%. Outdoor advertising increased 1.9% to €1.1 billion. Web advertising increased, year on year, 12.1% to €516 million but the tide is clear. Last year Web advertising in France increased 21.6% over 2006.

FrancePub also released the big number. The total cost of advertising, including commissions and agency fees, declined 1.4% to €32.4 billion over 2007.

The news seemed to have an immediate effect among stock traders on two French media giants dependent on ad revenues. Outdoor giant JCDecaux lost more than 18% share value in the stock betting parlor the day the IREP numbers were released. Lagardère Group’s share price dropped 15% the next day (March 12). Others in the French media sector groaned.

"There is no visibility for 2009,” said M6 President Nicolas de Tavernost, quoted in Le Monde (March 13). His boss, RTL Group CEO Gerhard Zeiler, offered at a Luxembourg press conference (March 12): “Given the current market cycle and advertising bookings in the very short term, it is impossible to give a true annual forecast.” M6 is expecting ad revenues to drop 7.5% to 8% in the first quarter. “No visibility” is stock trader babble for a range of admissions from “I have no earthly idea” to “If I told you what I know I’d get fired.”

Less grumpy were the advertising people. It’s probably genetic.

“Advertising does not collapse,” said BETC Euro RSCG co-president Raphaël de Andreis to Les Echos (March 11). “It mutates. A new world is emerging.” BETC Euro RSCG has the McDonalds France account.

Adding the requisite French analysis, de Andreis offered the “French Paradox.”  French people are “historically marked by criticism of consumption.”

“The French love to eat. They buy as much as the others. But they do not enjoy the act of consumption.”

Optimism, then, is “an act of resistance.”

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