April 21, 2009

Cons To Fill A Black (Media) Hole?

By admin

In this snapshot of international advertising forecasts from emarketer , it’s predicted that the average volume of advertising in Canada will drop as little as 2.5% in 2009, but if you look at global numbers (towards the end of the article), advertising around the world will drop anywhere from 6 to 10%. As an aside, that could be as much as $50 billion in lost global ad sales.

For Canada, let’s make some assumptions:

  • The value of all advertising in Canada is roughly $25 billion per year.
  • The impact of the drop in advertising will be relatively light compared to the global spectrum, but bigger than the smallest survey.  Let’s say the drop will be around 6% of total ad sales.

What’s the point of all this? We don’t get the magical $150 million that’s being tossed around as a short-term subsidy for corporate media, but a whopping $1.5 billion in ad sales , ten times the estimate that Canada’s media giants are said to be asking for.

And … what’s the point of all this? We’re getting the soft-sell folks. We’re being told it’s just a ‘temporary small adjustment’ and a small investment by the feds will plug the hole.  We’re being told life for small programmers and stations will be back to normal once we’ve spent Canadian taxpayer dollars on back-fill to replace defunct advertisers.

Don’t be fooled. If we start pumping cash into these entities, it won’t end.

Don’t let it happen people. Once the Cons start feeding these junkies, they’ll come back for more and more and more and more …

$150 million today will be $1.5 billion tomorrow and $5 billion next year.  Don’t start because it will never stop and it will never be enough.

Want an example?  How about the car industry?  Or forestry?  Or other natural resource producers?

Here’s my suggestion: let the market work things out (for a change).  If it has to happen, let the media companies go bankrupt and do what a true market adherent does:  buy low and own the market.