In a 180 degree turn from last post topic (more pleasant topic than bankruptcy)…..positive signs are mounting for ad-based business – why do these seem so quiet when all the bad news regarding revenue drops and competitive threats seemed like front page news forever??

*Most obvious: the public media companies’ discussion of year-end results show improving trend and most of these companies cautiously forecasting quarterly increases to occur in q1 with the trend continuing into q2.  The remaining Media public equity analysts have projected increased revenues/EBITDA for 2010 for the companies they follow (and in some cases have recently revised upward based on Q4 2009 quarterly call comments).

*Less obvious wins recently:

-Supreme Court ruling removing limit to corporate campaign spending.  A huge (but surprisingly quiet) victory to ad-based businesses, with television as big winner.  Look for this effect  (in addition to already saturated schedule from candidates) later in 2010 and beyond.

-Average Miles Driven increased again in q4 2009 after several quarters of drops during worst part of economic crisis.  Obviously biggest benefit to radio/out-of-home. 

-Potential reinstatement of 661 GM auto dealerships that were slated for closing.  While requirements need to be met for reinstatement, if majority indeed do reopen, great news for local ad-based business, as these dealerships need to advertise that they will in fact not be closing.

While the operators must continue to drive these increases, as most seem to be doing in q1 and q2 2010, the stage now seems truly set for success (vs. the modest bar set in 2009).   Smart equity starting to focus on ad-based businesses to catch properties at bottom of cycle.  Debt still hard to come by and pricing high, but history tells us this part of equation will follow….

Tweet this!