It's a mad, mad, mad, mad TV advertising world

Michael Hedges May 7, 2008

Commercial television company executives may be looking forward to summer holidays, somewhere in the distant future. But it's a long slog to Olympics time, if that brings up ad spending. There was a first quarter slow down in ad spending. Don't blame it all on the internet.

French TV broadcaster M6-Metropole reported (May 6) first quarter revenue off 3.3% from the same period last year. Ad sales at the M6 channel dropped 0.5%, though ad sales at the digital channels were up 46%. Non-advertising sales – that would be teleshopping – was down 10.5%.

The company’s statement referred to “sluggish” consumer spending and a “gloomy” advertising market. Declining sectors for M6 ad sales were publishing, retail and banking “that were hit be the economic slowdown.”

RTL reports mixed first quarter results; positive in Germany, the Netherlands and Belgium, not so positive in France and the UK. In the interim statement (May 7) RTL says first quarter revenue dropped 2.9% to €1.32 billion.

"The outlook for the full year 2008 remains unchanged. With regard to advertising sales, RTL Group has - despite the current economic climate - no reason to be pessimistic," said the RTL statement. First quarter profits were up 8.7% to €188 million.

And the reports from Spain are equally miserable. Share prices for TV broadcasters Telecinco and Antena 3 dropped, more, this week, both now about 20% lower than this time last year.

"Everything points to the fact that we are undergoing a significant slowdown,” said the statement accompanying a Zenith Vigia study released this week (May 6). “Two months ago, it looked like the crisis could be put back to the start of 2009, but now sentiment is much more negative." The study projects below inflation growth for advertising across all Spanish media.

Then, too, DG Infos and Media Commissioner Viviane Reding put the hammer to Spanish television (May 6), warning them of an impending court appearance if the per hour quantity of TV ads isn’t dropped, post haste, to the 12 minute European limit.

Economists consider ad spending a lagging indicator of economic health. Once ad spending drops, it’s fairly clear that consumer spending is already falling. Fuel and food costs sent European consumer spending tumbling 1.6% in March, according to the European Unions’ statistics office report (May 7), the greatest one month drop since 1996 and twice the rate of prognosticators. So much for them.