Local Media Landscape is Improving

Implications for 2011 remain uncertain
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Implications for 2011 remain uncertain
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NEW YORK: There are signs of recovery in local media markets, including price stabilization, early bookings and some improvement over last year in the automotive category. The Olympics and fall elections are expected to boost the comeback as well, though both media events could have a deleterious effect on 2011.

“Primary investor focus is still on 2010 but questions are starting to rise on 2011,” wrote Marci Ryvicker, the prolific analyst at Wells Fargo. “We are not writing off 2010 just yet--we would hate to do that, especially for media that have not seen growth in five-plus years--but we are starting to get questions on the revenue and expense trajectory of 2011 and beyond given that 2010 is going to be a significant year in terms of advertising growth.”

Even years have the normal Olympics-elections contributions, though the elections this year could be even more lucrative for media companies given the Supreme Court’s decision to delimit corporate contributions.

“Add to this the auto comeback and a recovery off of the worst advertising recession in history,” Ryvicker said. “As we move into H2 and 2011 becomes more uncertain, we think investors will start to focus more on late-cycle media, such as outdoor.”

With regard to local media pricing, she said about half appeared to be compensation driven. “The most important data point that we picked up is that price continues to firm--first in television, followed by radio and lastly outdoor.”

There are also indications in local markets that traditional advertisers will book earlier than usual to avoid an expected “squeeze” from new political buyers. That traffic is expected to show up in the second quarter.

“Visibility continues to improve although is far from where it was pre-recession,” Ryvicker said.

(Image by Christine Grabig)