I’m curious if the current tarriff turmoil is hurting mauntaung or getting new advertising. What’s the mood out there?
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Is the Current Tarriff Turmoil Hurting Advertising?
- Thread starter delgriffith
- Start date
Not meaningfully, yet. Or at least not enough to tease it apart from longer-term revenue struggles.
I think, for the moment, most businesses are taking a wait and see approach to the US government's tariff policy, because they haven't yet had time to determine the impacts on their cost of revenue or what mitigations they might be able to deploy.
I think, for the moment, most businesses are taking a wait and see approach to the US government's tariff policy, because they haven't yet had time to determine the impacts on their cost of revenue or what mitigations they might be able to deploy.
While I agree with your analysis, I think that the President's chaotic on-again off-again behaviors around these tariffs will have a chilling effect on future advertising campaigns. Businesses of all shapes and sizes need economic stability in order to function efficiently and profitably and Mr. Trump is creating a lot of economic instability with his tariff pronouncements.
I would hate to be selling in an agriculture area. China buys a lot of grain, chicken, and nuts from the US.
I'm sure we all have an opinion on this. When she delivered her 1st quarter results to stockholders, Cumulus CEO Mary Berner said the company's first quarter results were hurt by the atmosphere caused by the tariff announcements. There have been numerous articles done on the subject speaking with experts. One such article was came from BIA:
www.insideradio.com
The point of the article is that we don't know how the costs of the tariffs will affect advertising, but the uncertainty is what's affecting the market.
BIA Explores Tariffs And Their Impact On Local Advertising.
President Trump’s controversial pursuit of tariffs has ushered in a new era of economic uncertainty, illustrated by volatile stock markets and what many see as a slowing U.S. economy. BIA
The point of the article is that we don't know how the costs of the tariffs will affect advertising, but the uncertainty is what's affecting the market.
I know of one local automotive (dealer) advertiser on WEQX who has mentioned "pre tarrif" inventory. So, I imagine it's just a waiting game until "pre tarrif" inventory/stock runs down. I think it depends a lot on the honesty of the businesses/advertiser.
In my opinion, there's something very socialistic about these tariffs. While the government wouldn't "own" the means of production, the tariffs are in essence determining the means of production. So the mythology of a free market economy is completely destroyed. Companies would be forced, by reaction to the tariffs, to completely change their business model. What we're seeing is that the government wants to have a hand in all private businesses. By doing so, the government deputizes private companies into becoming tax collectors.
How would that effect radio? Advertising is an expense. If companies need to reinvest in different production systems or eat a chunk of profit so the tariff-inducted prices don't kill their business, that leaves less money to buy advertising.
How would that effect radio? Advertising is an expense. If companies need to reinvest in different production systems or eat a chunk of profit so the tariff-inducted prices don't kill their business, that leaves less money to buy advertising.
The less free the market, the less advertising. There weren't any radio commercials in the Eastern Bloc. Where the government has picked a winner, either by owning the means of production directly or just by picking a favored option by slapping punitive taxes and regulations on others, there's not as much need to advertise.
Having said that, I'm always baffled by some of the stuff that gets advertised. I saw a TV commercial for water recently - not bottled water, just the water supply. "Makes life flow better." Nobody can choose to go without it, you don't get a choice of which water supply you have at your house, so why?! A better slogan might be "if you don't drink this, you die".
I don't know about radio, but there definitely were TV commercials in the Soviet Union in the 1980s:
In the current climate with government virtually crippling/shutting down regulatory agencies, messaging like this serves as a reminder that even the most basic resource is needs protection. Even here in Australia, I've heard of the story around the water supply in Flint (MI). To this day, some people still don't get that some actions (e.g. mining, oil/gas drilling) can have effects on water supply. So promoting a clean supply could actually make viewers think a bit more about their basic resources.
In the 90's, several international broadcasters had radio stations in Russia. Metromedia had stations in Moscow and St. Petersburg.
Anecdote from the St. Petersburg station: the Metromedia studios we right across the river from the famous palace, but in an area frequented by gangsters. So both the receptionist desk and the manager's desk had bullet proof "vanity shields" and front panels to them so staff could hide under them if there was gunfire or someone barged into the offices.
In our side of the world, we have Cuba that does not allow any advertising on its 100% state owned electronic media.
In Venezuela, it is highly regulated, as it is in Nicaragua. In those two nations, the number of commercial radio stations has dropped by more than half under the socialist regimes, and in Nicaragua, many of the surviving stations are government or church owned. Nearly all the "original" owners of stations in Venezuela have fled the country.
I have not seen tariffs hit radio specifically but certainly TV and Movies yes there’s a tariff threat but that could be overturned by congress and courts.
www.yahoo.com
globalnews.ca
Music labels also have an uncertainty with tariffs too. Not sure how they affect advertising for now but we should see.
Could Trump’s Movie Tariff Add Momentum for Federal Filming Incentive?
President Trump’s initial proposal to impose a 100% tariff on foreign-produced films was met with bafflement and horror in Hollywood. But for lawmakers who represent film industry workers, it looked like an opportunity. “I would like to refocus the conversation around a national film tax...
Trump, tariffs and music: What could possibly go wrong? | Globalnews.ca
The zigzagging, on-again-off-again policies regarding tariffs in the U.S. will have a greater impact on music than people realize. Possibly. Maybe.
globalnews.ca
Music labels also have an uncertainty with tariffs too. Not sure how they affect advertising for now but we should see.
This article says people are buying now before the tariffs take effect:
www.insideradio.com
Tariff Concerns Spur April Retail Sales Growth, NRF Reports.
Retail sales posted another solid gain in April, as consumers pulled forward purchases to sidestep anticipated price hikes tied to new tariffs, according to the latest data from the CNBC/NRF
I don't understand why with tariffs -- which operate similarly to a flat tax -- would make advertising any more difficult a proposition than the cumulative 22% inflation we've encountered since the pandemic. Either advertisers want to sell stuff, or they don't. And a lot of stuff being advertised isn't directly connected to tariffs.
Now, if stores go under because of the tariffs, a drop in advertising is going to be understandable.
But stores have been going under since the Pandemic hit, and some even before that. Drops in brick and mortar stores over time has been a given..
Any of you in the business side of radio who can explain the difference?
Now, if stores go under because of the tariffs, a drop in advertising is going to be understandable.
But stores have been going under since the Pandemic hit, and some even before that. Drops in brick and mortar stores over time has been a given..
Any of you in the business side of radio who can explain the difference?
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My view is they're not different. Just when we thought inflation was under control, when we thought listening levels were back to what they were before the pandemic, we now have a new challenge. Advertising isn't always about reality. It's usually about perception. If business owners have a perception we're in for a tough time, they want to hold on to their money. The articles I've been posting here deal with that perception. Primarily because we haven't seen the actual effects of the tariffs yet. There's a delay factor. But everyone's shorts are just a little tighter.
The fundamental difference is magnitude. 22% cumulative inflation over 4 or 5 years is very different than import taxes of 20% to 145% on essentially all imported goods, which take effect on a certain date.
The fear, which again has not yet been realized, is that one of the costs business executives will cut is advertising. Advertising is usually one of the first things cut when consumer sales slow.
In this business, margins are slim. It would not take a large decline in advertising to send Cumulus into bankruptcy again.
I know during previous periods of economic downturn/recession here in Australia, CRA and Free TV Australia have pushed vigorously to keep clients advertising by promoting brand awareness more than products. This served to keep consumers aware. I've been with my employer for 20 years, and there are about a dozen clients who have not stopped advertising in the entire time. Even through the numerous economic downturns, while others stopped and eventually disappeared, the clients who stayed on board prospered when the economy recovered. In the age of on demand and digital, the question these days is, does traditional media (globally) have the strength to survive a US recession, if it were to occur.
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