With America in bad debt and local consumer confidence at a conservative low, share prices of our media companies have fallen to a long-term low due to low advertising revenues. 

 

In the harsh cycle of this thing called the economy, as Australians hold back on shopping splurges and increase personal savings, the lack of profits for retailers is forcing them to cut back on advertising budgets. And when this happens, shares of Australian media companies start to fall.

It was announced yesterday that Australian media shares have hit a long-term low due to the drop in spending both locally and in the US, causing negative impact on advertising revenues.

According to The Australian, Fairfax Media, publisher of The Age, The Australian Financial Review and The Sydney Morning Herald reached a low of $0.84 yesterday before closing the day at $0.86. While Fairfax was the worst hit, losing 3.9%, other media companies were not spared either.

Ten Network Holdings fell by 3.7% while Seven West Media Group suffered a 3.3% lost. News Corporation was also down by 3.1%.

This comes alongside announcement of the US debt ceiling being risen once again, which has led to much uncertainty about economic situations both overseas and here in Australia.

Contrary to these figures, PricewaterhouseCoopers released a report earlier this year that forecasted that the overall Australian advertising market will increase by 4.2% this year and will continue to grow in the next five years.

Belle Kwan
BY Belle Kwan ON 4 August 2011
Assistant editor, Marketing magazine & marketingmag.com.au
A marketer's dream who believes everything she sees on TV.
Advertising is not evil, it is an artform and a science.