How local media feel the recession
Cory Bergman October 6th, 2008
Don’t look at media stocks. Well, if you must. Tech companies, too. If you’re wondering about the effects of the economic crisis on local advertising, AdWeek has a good overview story today. Quoting:
“Historically, local markets have been less susceptible to economic cycles because they are driven by small- to medium-size businesses that don’t have public shareholders to please and, thus, have less pressure to cut costs such as advertising. But given the broad implications of the credit market, ‘this is one time when a national situation is driving a local outcome probably more dramatically than it would ordinarily,’ said Steve Ridge, president-TV and exec VP at Frank Magid Associates.”
The best local sectors during a recession are necessity items like plumbers, health care, personal care and lower-end retail.
3 Comments Add your own
1. tdc | October 6th, 2008 at 11:25 am
you forgot lawyers
2. Aaron | October 8th, 2008 at 11:19 am
When credit is tight it has a chilling effect on ALL business. Steve Ridge’s assessment neglects the obvious fact that business is a set of interconnected relationships. Over time, as suppliers become less able to ship on time (due to higher fuel costs,
encounter credit problems of their own that would enable them to pay for expansion, or payroll, or force them to alter their own credit terms with their customers ie; the local businesses that buy local advertising… it will slow down for the whole chain of relationships.
The need to advertise will remain but bills will be paid later, and ads will be curtailed.
3. Anonymous | October 12th, 2008 at 5:19 pm
This must be why the Statesman has more and more lifestyle stories that are really just advertising special sections on one page. D’oh!
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