Cory Bergman @ LostRemote refers to the latest Borrell & Associates Report stating that the "big local slowdown has begun." Local "digital" advertising revenue growth estimates slashed from 40% to 8% for 2009.
Gordon Borrell is known in the local TV world for his aggressive growth estimates. Huge growth has been projected each year, fueling unrealistic expectations for station sales teams, with low levels of investment and even lower levels of buy-in to the online transformation at the TV exec level.
Local TV sales management has consistently chafed at corporate expectations set on the basis of Borrell's projections, and it appears, rightly so...
Ultimately, a significant portion of TV execs allowed themselves to deliver "digital" revenue as bundled (value add) package components, no matter how it might be positioned. An unfortunate truth, and as business drags, the reality will come out. Who really has product and talent positioned to engage local advertisers? Can local business owners make it through this recession without focusing on marketing that can be 100% accountable and transparent?
TV sales management teams have been re-trenching against the "core" biz for at least a year- the current downturn has been a relentless reality in local TV for nearly two years. A smart move, and a necessary one for these tough, smart TV managers who need to hold on. Ultimately, this is playing defense against a better, faster team.
Cory's post also shares a Belo Corp letter sent to shareholders. The letter addresses the 75% drop in Belo's stick price, and suggests that the company is preparing for the storm. Here's the thing...storms pass.
What happens if (when) results don't rebound after '09? Tough times will continue to push the migration toward purely accountable, digital solutions, and away from TV. I would never suggest that TV is dead or even dying, but I will suggest that we've just begun to see the re-alignment of ad spending and local media (especially TV) will look vastly different the 20teens...
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