Local Media Already Hurting; Recession Will Only Make it Worse

Implications: The threat of an imminent recession means more bad news for local media, especially radio and newspapers, which are reeling from lost advertising.

Analysis: As if market conditions were not bad enough, add to that the threat of a recession, and what could be a long-term one, and its more bad news for local media.

While this Advertising Age article posits that during a recession local media often don't feel as much impact, this one could be different.  It will.  The situation is ugly, and it is not going to get better quick.

Radio was already reeling before the latest bad news on the economic bailout and strapped credit markets hit.  Newspapers were also suffering.  Local advertising is the bread and butter for radio--nearly 80% of their revenue base; for newspapers it is less, but well over 60% on average.

Ad Age points out that most of these are small businesses, which is true, and they are already hurting because of credit limitations.  Advertising is one expenditure that is easily cut--not without consequences--but desperate times calls for desperate measures.

Look for local ad forecasts to be revised downward yet again for radio, newspapers, and even local television.  Political will help, but it won't be enough to stop the ugliness.  Even without all of this gloom and doom, 2009 is shaping up for another slow year with no Olympics and no political and a bad national economy that will trickle down to most local markets.  Grab a thumb and assume the fetal position.