Analyst: Lamar Revenue to Decline 9%; More on the Way
Lamar Advertising could see a 9 percent decline in revenues for Q4 2008, according to Wachovia, and the Outdoor Advertising Association of America canceled its national convention planned for May 17-19 in Miami.
Back in November, BNET suggested that billboard provider Lamar was the “canary in the coal mine” of the advertising economy because its Q3 revenues were flat and net income was down.
The argument was that as Lamar provided boards over a wide geographical area to a wide variety of clients, and was relatively unaffected by the internet (you can’t move a highway sign to the web the way you can a TV show, for instance), that any hurt being felt at Lamar was a good indicator of where the rest of the advertising business is going.
At the time, the item drew the attention of the CEO of Riley Outdoor Robert Moore, a competitor to Lamar. He defended Lamar in the comments section of the story:
I listened to the conference call last week as well and while the picture is not one that is real good I will submit to you that the Lamar operation is not going down the road that you have painted for your audience. I think that they are making the right moves in cutting expenses and rolling back the digital rollout in this difficult environment.
I compete in North Carolina with them and while we have seen a slow down in ad spend we are not seeing the type of doom and gloom that you are projecting.
… I would not say that they are the barometer for the ad business as you and I both know that this recession will more than likely put an end to many of the Newspapers in this country and if Lamar has anything to do with it the Digital Platform that they have in place will speed along that process.
Robert Moore
Shame on me for not realizing at the time that Mr. Moore was that Mr. Moore!
Anyway, the fact that Lamar is looking at a significant Q4 revenue decline and a 13 percent decline for Q1 2009, per Wachovia — coupled with the crushing recession we’re now clearly in — I think proves my original theory.
Which brings us to something potentially more interesting: As soon as Lamar’s revenues look like levelling off, we may be on the way out of the recession.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
BNET User Analysis