Advertising Overview: Newspaper Rep Firms Give Their Forecasts for 1994

Article excerpt

WHILE MOST NEWSPAPER representation firms agree that 1994 will bring many chances to post gains from 19%, they say the opportunities will be in specific categories, rather than a general, overall improvement in advertising.

The following summaries give a comprehensive picture of what is expected in newspaper advertising in 1994. The three participants, Cresmer, Woodward, O'Mara & Ormsbee; Papert Companies, and Sawyer Ferguson Walker, based their predictions on their client lists, and the forecasts reflect the circulations, regions and markets of their clients.

Advertising categories not included by at least two firms were omitted. Newspapers First and Landon Associates did not present formal forecasts for 1994.

OVERVIEW

CWO&O: After two difficult years, newspapers are poised to mirror the growing economy and show improved profitability.

However, gains won't occur as a result of a booming economy or increases in advertising volume. Instead, improvement will come from efficiency measures that the industry has taken.

Despite the profusion of new products and technologies (audiotex, alternate delivery, database marketing, niche publications, on-line services), profits will be generated almost exclusively from the old reliables of full-run run-of-press, classified and preprints.

Setbacks might occur if newspaper executives are reluctant to continue experimentation and investment in programs that are struggling but critical to the industry's diversification and future success.

While 1994 will be a better year overall than 1993, major difficulties remain. Competition is closing in from all directions and the fundamental problem of commanding the attention of a generation that has been raised on television hasn't been solved.

Papert: The economic rebound that many anticipated in the latter half of 1992 and into 1993 has not developed. There is good news in some regions, but others are still in recession, and it isn't likely that there will be much change in 1994.

Some factors will contribute to a brighter 1994. Corporate restructuring is allowing companies to emerge from bankruptcy with less debt and with a proper deployment of resources, which will help in an increasingly global environment.

Increased trade, easing of trade restrictions and continued low interest rates will combine to stimulate growth.

However, retroactive taxes and a nationwide health care program may create huge hurdles for a growing economy, and too many details aren't clear. The picture probably won't be clear until next fall.

SFW: Many people still are waiting for the economy to take off and for businesses to bounce back the way that they usually do after a recession, but the economy has grown at a slow pace since spring 1991. The recent federal budget law will mean higher taxes and somewhat slower growth; however, the economy's current momentum will be enough to keep it growing through 1994.

There will be major regional variations. The Mountain states will boom, and the Southwest generally will be healthy as will the Midwest and South. However, the Pacific Northwest, California and parts of the Northeast will lag behind the national economy.

Newspapers will continue to ensure that they benefit from the emerging interactive services market, aligning themselves with cable and on-line computer companies. Joint ventures are being formed between newspapers and regional telephone companies, though these ventures are in the experimental stage. Whether they someday will cannibalize newspapers, serve as a companion to them or never become more than a niche market is not yet known. Also undetermined is whether they will be advertiser- or subscriber-supported or if they will be financially viable at all, but it is beneficial for newspapers to get involved with these ventures.

Classified advertising revenue will grow 4% to 5% from the 1993 level. …