The advertising market that stalled during the recession is kicking into gear again, thanks to car companies.
Auto ads will help to drive media companies out of the economic downturn, if Astral Media Inc. is any indication.
"I think the entire industry, and TV, has seen the rebound, and basically because of the car business; there's been a return," Astral chief executive officer Ian Greenberg told analysts on a conference call yesterday. He singled out GM and Ford, which like many companies slashed their advertising budgets last year. Both "are back in full force," Mr. Greenberg said. Honda and Kia have also stepped up their advertising buys.
Astral is seen as an indicator of the general state of the industry, since it is the first media company to report its earnings and does business in specialty television, radio and outdoor advertising across the country.
In an environment where advertising budgets shrivelled at the beginning of the downturn, cuts to car ads were particularly hurtful to media companies.
Roughly 10 to 20 per cent of Astral's advertising revenue comes from the automotive segment. The beginnings of a rebound in those revenues have driven television and outdoor ad sales especially.
"It used to be - six, seven, eight weeks ago - we had difficulty getting an appointment with an advertiser," Mr. Greenberg said. "But today it's a different picture ... there is momentum ... we know by experience that it's a good sign."
One segment where Astral did not see as much growth was in radio, which had modest declines and a 1-per-cent drop in ad revenue. However, Mr. Greenberg noted that radio markets over all were soft and predicted radio markets will rebound in the next few months.
Q4 / 2010 / 2009
Profit / $33.6 million / $27.1 million
EPS / 60¢ / 48¢
Revenue / $218.3 million / $209.3 million
Source : Company reports