Creative economy showing signs of stabilization

Headlines make it appear that the creative market is in a freefall. Layoffs at agencies, newspapers and magazines closing their doors, even online advertising has taken a hit. But digging a bit deeper, there are some reasons to be optimistic. Publicis Groupe, the parent of many large agencies, reported this week a drop in profits that is close to 10%, and revenue for all businesses dropped from $6.5 Billion to $6.2 Billion – a $300 million drop. But the good news is that their CEO is indicating that their business is recovering, and that they expect to see revenue growth in 2010. The slowing rate of decline is being reported by their peers at Omnicom and Havas, and recent forecasts from Interpublic are pointing towards a recovery in ad spending later this year. AOL, in the middle of a major rebranding and conversion to a media company, reported a decline in online advertising revenue last quarter that was only in the single digits – but they were profitable and made over $1M in profits after losing $1.96 Billion, with a B, in the same period last year. They’re still predicting declines in ad revenues through the end of the year, and – no surprise here – even larger losses of subscription revenue. Ad pages placed in magazines are still declining, but it is now in the single digits. The good news is that nearly one-third of publications are seeing an increase in advertising pages, and those that are succeeding and profitable are implementing multi-platform strategies to reach their audiences via mobile, on-line, and in print. Overall, the signs are looking more positive for the creative economy for 2010. While this may not lead to more hiring or more tech spending, it is showing a return towards normalcy.