Not much good news in advertising today.

First came the TNS Media Intelligence numbers, which, though dated, paint an awfully grim picture.  First quarter spending fell 14 percent, a big number in its own right, but even more startling when put in context. Take, for instance, the fourth quarter of 2008, when credit had completely dried up and companies were racing to cut marketing, staffing and every other expense. Ad spending then fell just 9 percent. Or how about the fourth quarter of 2001? After the bursting of the dotcom bubble and the attacks of Sept. 11? Spending dropped 11 percent that quarter.

Again, the 14 percent is a backward looking number. The first quarter of 2009 is history. For that reason perhaps the news could be taken in stride — if not for a brief statement by TNS research Jon Swallen that was included in the press release.

“While there are hopeful signs of general economic indicators bottoming out, the advertising sector still appears to be lagging behind. Available data from (the) second quarter shows ad expenditures tracking on a comparable plane to recent months.”

That doesn’t sound like the market is getting any better.

In addition to all of this from TNS, you had some less-than-upbeat comments from Interpublic Group at the Credit Suisse Global Media and Communications Convergence Conference this morning.  Frank Mergenthaler, the finance chief of Interpublic, which owns agencies like DraftFCB and McCann-Erickson, made it clear that clients are still scared to write checks.

Any signs that the economy is improving “have not manifested in people pulling the trigger on ratcheting up spending,” he said. “We are seeing signs, but those signs are more anecdotal than companies actually willing to spend.”

Nothing too cheery there.

(Photo: Reuters)

“This is not about going out of business. This is about getting down to business.”
So says the latest advertisement from General Motors, which hit the automaker’s web site and YouTube just hours after it filed for bankruptcy protection.

The theme is reinvention (”General Motors needs to start over to get stronger”) and it is the first glimpse of what the folks over at the Interpublic Group agencies that work on GM have planned post-bankruptcy.

Keep an eye on:

• Microsoft offered a look into a future where the Xbox 360 console is the centerpiece of any living room (Reuters)

• DirecTV Chief Executive Chase Carey may be headed back to News Corp (Reuters)

• Lions Gate Entertainment posted a wider-than-expected fourth-quarter loss (Reuters)

As the New York Times puts it this morning: “Even after receiving $15.4 billion in federal loans, General Motors is once again on the brink of financial collapse.” The reason is that the automaker burned through $10.2 billion in the firs quarter, while revenue dropped by almost half to $22.4 billion.

Does that mean GM is heading for bankruptcy? Possibly. Does that mean more bad news for the advertising industry, which has been hard hit by the pullback in spending from automakers? Not necessarily.

Take, for instance, the case of Chrysler. Adweek reports that the company, after filing for bankruptcy protection, is launching a new ad campaign that will debut on May 11 during prime-time television.

The initiative crafted by Omnicom Group’s BBDO in Detroit is designed to remind consumers that the automaker is still open for business, while highlighting the range of current and future vehicles in Chrysler’s portfolio and touting its rebirth as a global car company per its alliance with Fiat of Italy.

“When we asked consumers what they wanted to know about Chrysler, they told us to tell them about our products, tell them why they should buy our vehicles and give them a reason why they should be confident in the future of this company,” said Steven Landry, the company’s evp, North American sales, marketing, motor parts and service. “We believe this campaign delivers on all of those objectives. In addition, this campaign gives us the opportunity to reinforce that it’s business as usual and demonstrate a bright future ahead for Chrysler.”

As for GM, this is what Interpublic Chief Executive Michael Roth had to say about that situation during a conference call. (General Motors is a top client for IPG).

We can’t comment on what happens when you go through bankruptcy. There is a lot of flexibility in bankruptcy in terms of who gets paid, when they get paid, and what amount… Again I don’t mean to speculate, but once all this clears through and General Motors gets through whatever the process is going to be, there is going to be a demand to market automobiles. and we are well positioned to continue our partnership with General Motors. And going forward, we would expect to continue that relationship.

Keep an eye on:

• Cablevision is at it again. This time company management is talking about spinning off its Madison Square Garden business (Reuters)

• Eric Schmidt isn’t about to step down from Apple’s board, thank you very much (Reuters)

• Viacom executives are in for a wild ride this weekend, as Paramount’s “Star Trek” hits the theaters with huge expectations (Reuters)

(Photo: Reuters)

The news media may be preoccupied with Swine Flu and the Banking Crisis and the Auto Industry meltdown, but look beyond those hot topics and you will see a familiar story — you know, the advertising-business-is-getting-slammed story.

Advertising group WPP today said it would not meet its 2009 forecasts after quarterly sales fell 5.8 percent, as companies slashed marketing budgets. This comes after rival Omnicom on Monday reported that its first-quarter revenue fell 14 percent.

Interpublic needed a heap of cost-cutting moves — including job cuts — to help it post a loss that was smaller that Wall Street expected. Revenue fell nearly 11 percent — maybe that’s a case of it-could-have-been-worse for a company that counts General Motors as one of its single largest clients.

Perhaps a recent run-up in the shares of media stocks portends better days for advertisers, right?

Not really. Experts warn that advertising spending is not yet showing any indication of bouncing back. Omnicom’s CEO John Wren says even those who are “at all optimistic” are looking toward the back end of this year and the beginning of 2010 for any kind of recovery.

And certainly the Swine Flu, the Banking Crisis and the Auto industry’s woes aren’t likely to help.

Keep an eye on:

• McGraw-Hill’s broadcast revenue in the first quarter fell almost 23 percent reflecting softness in both local and national advertising. (Broadcasting & Cable)
• The U.S. Supreme Court upheld a government crackdown on profanity on television. (Reuters)
• Activision may pick Van Halen for its next Guitar Hero game (PaidContent)

(Photo: WPP Chief Executive Officer Sir Martin Sorrell, Reuters)

Slightly down is the new up.

At least judging from the reception that advertising giant WPP received today after it predicted like-for-like revenue would drop 2 percent this year.

Shares were up about 5 percent after the report from WPP, the last of the big three advertising holdings to post quarterly results. For all the worry about the advertising recession — and no doubt advertising is bad right now — WPP, Omnicom and Interpublic also showed some bright spots in their numbers.

WPP, in fact, said the in the ”long-term” the outlook for the advertising and marketing services business “appears favorable.” “Long-term” isn’t a particularly well-defined timeframe, but nonetheless those are pretty upbeat comments coming from an industry that has seen auto, retail and financial services spending drop like a stone.

“The fact they’re saying revenues in 2009 will be down 2% is relatively reassuring given the current climate,” RBS analyst Justin Diddams told the Wall Street Journal.

Keep an eye on:

• ABC is hoping the financial crisis makes for some good laughs, as it readies two Wall Street comedy pilots ( AdAge.com)
• The Seattle Post-Intelligencer newspaper is pressing ahead with plans to turn into an online-only publication (WSJ.com)
• CNBC takes it on the chin — yet again (Gawker)

(Reuters photo of CEO Martin Sorrell)

Advertising at the highest end of the luxury market may be the last to get hit in an economic slump, but it’s still going to get scathed before the ad market turns around, Nick Brien, who heads up Interpublic Group’s Mediabrands, a holding company for media buying and planning agencies,  told the Reuters Media Summit in New York.

“There will always be some brands and marketers who are going to want to live beyond the realities that are going on for the masses of people,” said Brien, who’s responsible for agencies like Universal McCann, Initiative, Magna, and J3 . “That will go on… (but) will it be as pronounced as it was, will be it as mainstream?”

Brien didn’t think so. Not when even Russian billionaires – with their boats and Rolexes — are feeling the pinch, he said. “Even if their wealth is coming down from a billion to half a billion, that’s what it is — it’s coming down,” Brien said.

As a result, ”the messaging is going to change very considerably.” Brien said Mediabrands clients globally have expressed concern recently that consumers are facing too much choice, especially at a time when “they have less funds, they have less confidence and they’re going to be much more considered and careful about the choices they make.” As CEO of Mediabrands, Brien oversees agencies that control billions of dollars in ad spend globally, though notes that most of his clients aren’t in the super high-end luxury goods business.

So for high-end luxury goods advertisers, it’s now going to be less about what media channel to use to spread their message of decadent living, and more about reworking marketing strategies to ensure big spenders still distribute their (slightly) shrinking wealth among pricey trinkets in these times of stress.

(Photo: Reuters)

If you were looking for any positive signs from the advertising industry, perhaps as vendors try to drum up business amid the rough economy, forget it. Times are tough there too.

On Tuesday, France’s Publicis said it expects to see weakness in mature markets and traditional sectors and a “marked slowdown” in the ad industry next year.

And Interpublic Chief Executive Michael Roth said clients’ spending plans were under pressure from the financial crisis.

“While we believe that with our strong performance year to date we remain positioned to achieve our financial objectives for 2008, the impact of an increasingly unsettled and volatile business environment on our sector is not yet clear and creates a risk to meeting our stated goals.”

Even Martha Stewart’s Omnimedia machine said advertising revenue in its publishing division fell in the third quarter, and ad results in the current quarter are down so far.

All this after Omnicom last week said some of its retail and automotive clients had begun to cancel some spending plans.

Keep an eye on:

• The Los Angeles Times plans to cut 10 percent of its news staff. (Reuters)
• MSNBC takes hits for its political coverage. (Hollywood Reporter)
• OK! magazine is unveiling a major leadership shake-up. (New York Post)
  

Who was it that wrote about the “The Road Not Taken”? Robert Frost?

That’s somewhat ironic, because you have to figure Yahoo shareholders are feeling pretty frosty toward Yahoo’s management now that its stock price is wallowing around $13 , near five-year lows, amid a weakening display advertising outlook.

The road not taken? Microsoft’s offer of $33 a share for Yahoo. That deal died in the summer, before the global banking crisis had reared its ugly head. What was once a $47 billion deal would be worth significantly less today. 

Yahoo’s premium display business is getting roughed up by a slow-down by advertisers such as financial companies and automakers, and caution among online advertising customers.

But don’t assume that since Microsoft didnt marry Yahoo, that the software maker doesnt find the online search giant, you know, attractive. American Technology Research analyst Rob Sanderson says Microsoft may make a new offer “as Yahoo shares decline and Microsoft struggles in its online services business.”

Reuters

Keep an eye on:

• Wachovia Securities cut its outlook for advertising spending and said the worsening outlook would mean lower-than-expected earnings and revenue for Interpublic Group of Companies Inc, Omnicom Group Inc, and MDC Partners (Reuters)
• Google is making an aggressive play in the online gaming world, as the search giant announced it will expand its AdSense product to various Web-based gaming sites and platforms (Hollywood Reporter)

The financial crisis is tough on everybody — Madison Avenue copywriters included.

Stuart Elliott of the New York Times looks at how tough it can be to craft an advertising campaign in this climate, particularly if your client is in financial services.

He points to a new campaign by Washington Mutual, which was sold to JP Morgan Chase amid all the upheaval. What do you say to consumers? The creatives working on the campaign went for humor, Elliot writes, deciding on a headline reading “We love Chase,” followed by “And not just because they have a trillion dollars.”

The same challenge is playing out in the marketing department of virtually every financial institution. As the stock market swoons, investors are watching their paper losses mount and their retirement accounts dwindle. As the most trusted names in banking and brokerage have fallen like dominoes - despite reassurances from top executives that nothing was wrong - what message or slogan could possibly reassure a jittery public?

If Madison Ave figures out what the slogan or message should be, they may want to share it with governments around the world.

Keep an eye on:

• Screen Actors Guild leaders said they are confident union members will support authorizing a strike against major Hollywood studios if the issue is put to a vote, despite a faltering U.S. economy (Reuters)
• Spending on global advertising is expected to grow 4.3 percent in 2008, less than initially forecast, with developed markets such as North America the hardest hit (Reuters)
• CBS, Fox and the CW are off to the best starts in the new fall TV season, a new report from research agency Magna says (AdAge)

(Photo: Reuters)

Quarterly results arrived today from Interpublic Group and Publicis. Guess what? Advertising spending held up in the second quarter, at least for the two ad companies.

You would think — given all the doom and gloom — that corporations would have sharply cut back on spending in the second quarter. Indeed, just about every expert out there has cut spending forecasts.

Yet Interpublic, home of DraftFCB and McCann-Erickson, posted revenue that raced right past expectations and said it was well on the way to achieving its goals for the year.

And the economy? They said they’re watching it and keeping an eye on costs.

“While the growth that we posted during the first half demonstrates that we have yet to see retrenchment on the part of clients, we will continue to monitor the broader economic situation closely,” CEO Michael Roth said in a statement.

French advertising group Publicis also seemed to weather the storm in the second quarter, increasing organic sales in all areas, including the United States. It did say, however, that it expected marketing investments to fall in some areas, citing the automotive and financial sectors, because of the credit crisis and rising commodity and food prices.

Of course, solid spending by clients in the second quarter may not tell us much. Many see advertising spending as a trailing economic indicator, meaning that we could very well see clients cutting budgets for the second half of the year.

“We are not immune to the macroeconomic environment. We will certainly see some client areas affected,” IPG’s Roth said on a conference call. But so far clients see the downturn as an opportunity to build brand, he added.

“We haven’t seen a major pullback.”

On the other hand, clearly everything isn’t sunshine in the advertising world. Just check out Meredith, whose earnings fell because of lower advertising revenue at its magazines. Or take a look at Viacom Inc, whose earnings showed weakness in retail and automotive advertising crimped hurt sales for its cable TV networks.

Keep an eye on:

• Dell is testing a digital music player that could go on sale as early as September in a challenge to Apple (WSJ.com)
• Social networking site MySpace announced a series of new senior executives (paidContent.org)
• Billionaire oil investor T. Boone Pickens has sold all his Yahoo shares in frustration over Yahoo’s failure to reach a deal with Microsoft (San Francisco Chronicle)
• ESPN will unveil a new online network that will encompass a cluster of Internet sites aimed at action sports (LA Times)

(Photo: Reuters)