Viacom (VIAB) and CBS: “We See No Ad Recession”

Dauman (Viacom) and Moonves (CBS) said yesterday that they have not seen weakness in ad spending as a result of the housing slump (notes below).  While this is good news, we feel the need to add a word: “yet.”  For what it’s worth, we will also add that, in early 2001, then-AOL-president Bob Pittman said almost precisely the same thing at a Merrill Lynch investment conference–a few months before the company’s advertising revenue cratered.  (“We don’t see it.” The words still ring in our ears…)

Based on anecdotal conversations and reports, we believe some advertisers are taking a more cautious approach to spending than they were a few months ago.  We take this as yet another data point suggesting that we are in the early stages of a cyclical ad downturn.  As a result of this and housing weakness, we remain on high alert.

CBS CEO Moonves:

If economy is in trouble “I haven’t seen it directly affect advertising.. we are not seeing any trends that say people are pulling back.” National ads strong, local is less strong but still very good. Scatter ad pricing for end of the year is very, very good. Prices up 35%, 40%.

Viacom CEO Dauman:

We are not seeing impact on advertising from weakening economy yet.  There is usually a 1-2 quarter lag in cycle.  But we usually have some canaries in coalmine, and we are not seeing them.

See Also: Internet Recession Watch: Tracking the Signs