Advertising revenues for local television stations have been lower in the first half of this year than expected, something industry officials expect to continue the remainder of the year. They expect, however, a rebound in 2002.
Many are holding the automotive industry responsible for this year’s lackluster performance.
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“We’re cautiously optimistic the second half of the year will be better,” said Paul Karpowicz, vice president of Providence-based LIN Television Corporation. “It has not been a great year and we’re getting by on the expectations that 2002 will be better, with local and congressional elections and the Olympics.”
Karpowicz believes that a slowdown in the automotive industry has translated into a slowdown in advertising revenues.
“The economy is generally off, obviously,” he said, “and for us in the television business, when the automotive industry is slow that has a real significant impact on us. And automotive advertising is way off.”
He estimated automotive ad revenues are off by 15 percent at all his stations.
Lisa Churchville, general manager of WJAR Channel 10, said this slowdown is traditional in a non-Olympic, non-election year, but this year’s is worse than usual.
“Looking over revenue in the television marketplace for the past 15 years, the market has a biannual cycle,” she said, “but this slowdown is a bit more significant than we thought it might be.”
Churchville said the slow automotive industry is not the only reason for the local TV ad revenue decline.
“Automotive is significant nationally, which is what LIN TV knows, but compared to my station group automotive has been less significant,” she said. “We’ve had some retail shifts and some other shifts in spending.”
Dan Lyons, general sales manager of WPRI Channel 12 and WNAC Channel 64 has felt the decline in automotive ad revenues, but said other industries are filling the gaps.
“What we’re finding is that automotive is off,” he said, “but we’ve had other categories pick up. Where (automobile) manufacturing has been off, local auto dealers have picked up some of that. And retail has been fairly strong with younger products such as the soda business and new products like Red Bull (Energy Drink)”
The retail shifts have actually been good for automotive sales advertising, said David Laliberte, general sales manager at Tasca Ford..
“This year we actually did a little more television advertising because the rates are so competitive due to the retail locations not spending as much,” he said. “This year we found it more to our advantage to go with television rather than newspaper.”
Laliberte said auto manufacturing is an entirely different story.
“Ford is definitely spending less money than in the past based on the fact that they’re selling fewer vehicles,” he said. “I think what has happened is they’re resigned to the fact that the industry is on a downturn and they scale their production based on what they anticipate the sales are going to be.”
“The auto manufacturing industry was on an eight-year run, which is unheard of in the industry,” said Laliberte. “Typically it’s a two-year or a three-year run, and this is the first year since 1992 there has been a downturn.”
Lyons said he is optimistic this downturn is a precursor to a rebound.
“What we’re seeing here is that the year 2000 was just a historic year,” he said. “If domestic automotive picks up you will see all the markets pick up. It’s really not that bleak an outlook.”
