Thursday, January 24, 2008

Recission - Visiting an Old Blog Entry


With all the talk this week of a recession and the stock market becoming a weird thrill ride most days I dusted off a piece I wrote here back in mid-November about the recession we are clearly in. While everyone (the Fed, White House and many in Congress) seem to be dancing here and not seeing the reality of a banking industry gone amuck, too much spending and the damage the high oil prices have on everything.



Surely CNBC will have bigger ratings as economic issues are clearly taking the spotlight. Rising Oil, the mortgage lending mess, the weaker dollar and the high cost of the war are starting to all combine and head us close to or into a
recession.


Retailers are already expecting a weaker holiday spending session and
we've already seen the auto industry struggle for most of the past year. It's
also affecting radio as the results from 3rd quarter in radio are disappointing
and in some groups it's more about 'just getting 07 over with' at this point.


So let's say we go into an official recession which would probably be declared
after more than a few months of a significant decline of economic activity,
according to the National Bureau of Economic Research. According to the NBER
we've been chugging along for the last 7 years without a recession - look at the
history of 'official' recessions for the last 60 years:


July 1953-May 1954 10 months


Aug. 1957-April 1958 8 months


April 1960-Feb. 1961 10 months


Dec. 1969-Nov.1970 11 months


Nov. 1973-March 1975 16 months


Jan. 1980-July 1980 6 months


July 1981-Nov. 1982 16 months


July 1990-March 1991 8 months


March 2001-Nov. 2001 8 months


They are usually not that long and over the last 20 years we've only 2 of
them lasting a total of 16 months.


I bring this up not out of a desire to give up radio programming for economics, but perhaps to help your team as you plan for 08 just ahead. We shouldn't let the 'R' word worry us even though there will be lots of 'hype' around it.


We also shouldn't let the 'R' word spook our advertisers and the teams inside the stations. Remember we sell advertising and there are always products and services looking to brand themselves regardless of the economic conditions. Actually a recession is the perfect time to build a brand. You will likely see less competition, less clutter around your message, and remember the audience is STILL THERE. Just because they may be holding their wallets a little tighter they are still looking for entertainment and we offer it for free every day.



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