Local TV Stations Anticipate Severe Downturn in '09

Local TV Stations Anticipate Severe Downturn in '09; National Spot Advertising Now Expected to Be Down 11.5%

By Brian Steinberg

Published: November 11, 2008
NEW YORK (AdAge.com) -- Local TV stations, already wrestling with technology that changes how people watch their programs and the resulting fallout of ad dollars, have even worse news to consider: The TV-station trade association, the Television Bureau of Advertising, has severely recast its 2009 forecast for local TV advertising downward, suggesting that local stations are about to see their situation go from bad to worse.

The trade group said today it now anticipates total spot TV ad revenue to fall 7% to 11% in 2009, down from a previous forecast of a 2% to 5% drop. Local spot revenue will fall between 4% and 8%, the TVB said, compared with its previous forecast of up 2% to down 1%. Meanwhile, national spot advertising is set to decline between 11.5% and 15.5% in 2009, the group said, down from a previous forecast of 7% to 10%.

The group also said it expects total 2008 spot revenue to fall 7.1% from last year, rather than coming in flat, as was forecast in September.

Perilous situation

The figures illustrate the perilous situation in which local TV outlets find themselves. Flush with a presidential election and Olympics telecasts, 2008 was expected to be a decent year for advertising. But the ongoing downward tilt of the economy has caused some prominent TV advertisers, most notably automotive marketers and car dealerships, to pull back significantly in recent months. Add that to the steady erosion of viewers who can now watch their favorite programs in many new ways, and the situation is dire.

The TVB rarely revises its forecasts. This marks only the second time the group has done so. The first time came after its 2002 forecast was rendered meaningless by Sept. 11, another event that forced advertisers to pull back on spending.