Advertising on the Rise

When the economic slump started a few years ago advertising executives began to worry if the advertising downhill slide would ever end? Would marketing money return to all media or just a few?

The answers are becoming much more clear and the outcomes are showing proving to be positive. The American advertising market, which has benefited from government stimulus and old media are showing recovery.

However, not ALL old media are showing growth. Advertising is still leaching out of newspapers, in particularly regional ones. It is returning only slowly to magazines. Billboards are faring better. Yet, the greatest old-media winner is TV, is most countries the main advertising medium.

In early 2009, it looked as if many public TV broadcasting stations might go belly up, but at CBS, ad sales rose from $4 billion to $4.5 billion from then to now. Shares in the company have more than tripled from last year's lows, although they are still well below pre-recession peaks.

Most of the time the advertising business comes back last, but this time it led. A rebound effect is at work. Car dealers and banks that stopped advertising in 2008 have decided they cannot stay out of the market for ever. Yet, there is two inherent reason why a drop in advertising must be followed by a rise. Just look at newspapers, where a painful fall in advertising in 208 was followed by another steep drop in 2-09, with a further fall expected this year. Television is recovering more strongly than other media because it has two distinct and growing advantages.

Why? First, companies that want to make the emerging middle class aware of their brands inevitably turn to television. That's its big advantage. Second, its power to monopolize attention is undiminished. Many newspaper readers have moved online, where they are worth less to advertisers. Not so TV viewers. In the first quarter of this year the average American spent 158 hours per month in front of the box, according to Nielsen, a research firm. That was two hours more than a year earlier. By comparison, he spent just three hours watching video online and 3 1/2 hours watching it on his mobile phone.