Television viewers could see much less of the Kiefer Kia Princess during the coming months if advertising sales trends continue on their current path. Marketing representatives from local media say ad sales are declining and auto and local business clients are scaling back their advertising the most.
During the third fiscal quarter of 2008, between July and September, ad sales for the newspaper, magazine, television and radio industries dropped significantly. A faltering economy and auto industry have provided the foundation for the struggling advertising industry.
Kim Sheehan, professor of advertising at the University School of Journalism and Communication, said falling ad sales during a recession are to be expected. Companies look to cut their budgets, and the first cuts often target advertising, she said.
Sheehan said newspapers are struggling the most during the recession. Like other forms of media, newspapers are affected by the poor economy, but they have also lost a significant amount of classified advertising in recent months to Web sites such as craigslist. They also lose advertising because clients are only committed for two days before an ad runs, making it easy to pull out at the last minute, Sheehan said, in contrast to magazines that commit their clients three months ahead of time.
“That’s like a triple whammy against newspapers,” she said.
The Newspaper Association of America reported what Sheehan predicted: During the third quarter of 2008, national ad sales in newspapers dropped 18.4 percent, compared to only 2.5 percent in the third quarter of last year. As recently as 2004, newspaper ad sales rose in the third quarter by 3.85 percent.
The magazine industry was hit as well. The Magazine Publishers Association found that third quarter ad sales dropped by 8.9 percent.
At the Eugene Weekly, advertising drops are just starting to show, said director of sales and marketing Bill Shreve. The poor national economy seems to have only recently began to catch up to the Eugene economy, Shreve observed, saying that “retail is off a little bit” in the last month.
The Weekly hasn’t seen a drastic drop-off in ad sales, Shreve said, because it doesn’t sell many auto or national ads. Local retailers have cut back their spending, but events like concerts are maintaining steady advertising, he said. However, Shreve said the staff at the Weekly is aware of what is happening to the rest of the newspaper business. “We’re extremely cautious,” he said.
Peter Barna, editor in chief of KD Magazine, a University student publication, said selling ads for the magazine was so unsuccessful during fall term that the winter term edition of KD will be found online only.
“Ads are always a problem but this year especially,” said KD art director Stuart Mayberry, noting that KD only sells local ads.
Barna and Mayberry said higher printing prices made finding advertisers especially important this year, but acknowledged that wasn’t the sole reason ads presented such a problem.
“Part of this is just where the industry of journalism is,” Barna said.
Sheehan said that because ad rates are based on exposure and supply and demand, television is the most expensive advertising market. It has the largest audience of all media types, limited time slots and high demand, especially during popular programs, she said.
Julie Koranda, national sales assistant for KMTR, the Eugene NBC television affiliate, said sales have been what people expected – a serious decline over the last few months.
Koranda said auto and fast food ads make up a huge portion of national ads that KMTR sells and there has been a huge decrease in auto ads since the summer. This created a huge hole in the station’s revenue.
Sheehan said television stations should expect auto ads to decline this year because the auto industry as a whole is faltering. She added that fast food ads are basically “recession-proof” – a trend Koranda has seen play out.
Koranda said KMTR has seen an increase in fast food ads, because people still dine out but want to spend less when they do. However, Koranda said fast food ads alone can’t fill the debt left by the loss of auto ads and said local advertising is necessary to make up the rest of the lost revenue.
Public radio is the only media sector whose advertising sales have not been greatly affected during 2008. Shirley Valentine, development associate for KLCC, Eugene’s public radio station, said “in radio overall, (ad sales) have dropped 10 percent over the last couple of months,” but at KLCC “we’re doing very well.”
Valentine acknowledged that like KMTR, her station has lost a significant number of auto ads. However, she attributes the station’s success to its older demographic. Because many listeners are older, the station brings in a great deal of medical advertising, such as Sacred Heart Medical Center and eye surgeons, she said, and that industry is still “going strong.”
Valentine also attributed public radio’s advertising success to the style of ads it runs.
Commercial ads, she said, are loud and obnoxious, where public radio ads are quiet and very short, sometimes only 15 seconds long. She said many people find this style successful because it provides a relief to listeners.
Perhaps the auto industry should take her advice when it tries to re-enter the advertising market.
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