When John Cassaday met behind closed doors with a top Toronto ad agency last week, the chief executive officer at Corus Entertainment Inc. heard the news every broadcaster in Canada has been waiting ages to hear.
After a year of stasis in the ad market, the agency had four blue-chip advertisers ready to dust off their cheque books and buy large blocks of commercial time starting in November. It was like being told the cavalry was finally on its way.
Having fought off steep revenue declines over the past 12 months with cost cutting strategies - the corporate equivalent of hand-to-hand combat - the media sector is desperate for some new artillery.
But emerging from this slump will not be simple. Perhaps as an over-correction to the free-spending ways of a few years ago, caution prevails among those now writing the cheques.
As tantalizing as the thought of four top advertisers at the ready was, it came with a major caveat. Those companies were talking about spending, but they weren't actually spending yet. With November only a few weeks away, they weren't ready to commit to Corus, owner of dozens of radio and TV properties, including YTV and the W network.
The same can be said elsewhere in the media sector. Money is being made again, yes. And ads are being sold, yes - but much of it is still happening at the last minute. A few years ago, big advertisers would have locked in their spending months ago. But with companies still jittery about budgets, many are holding off.
"The last seven weeks of bookings have been up dramatically from a year ago," Mr. Cassaday said on Thursday. "But visibility still remains a challenge."
All of this matters this week because the ad sector is being scrutinized closely as an indicator of confidence in the economy.
When Astral Media Inc. and Rogers Communications Inc. report earnings tomorrow, the past quarter will matter less than the crystal-ball predictions into the year ahead. Both are major TV and radio players and analysts want to know what sort of economic pulse is being seen and how strong it is.
There are encouraging signs. On the consumer spending front, Apple Inc. reported last week it set records for iPhone and laptop sales in the previous quarter. That means it will spend more on ads, causing a trickle-down effect.
But concerns abound as well. The Western economy has slumped, hitting ad sales at Corus, through its radio stations in B.C. and the prairies. That's a problem, since a year ago media companies were counting on the West being more resilient than the downtrodden East. But it's proving no different. Aside from some promising signs in Quebec, the ad slump is national.
Still, there is evidence of vibrancy. The women-focused specialty channels at Corus, including W, Cosmo and Viva, have seen a 25-per-cent jump in revenue of late. Rather than a blip, executives hope this is the beachhead to a recovery. Even if it takes longer for advertisers to actually write those cheques, the fact that there are more cheques potentially being written is a hopeful sign that worst may soon be over.
© The Globe and Mail
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