A recession looming? Take a look in the Mirror
Monday, June 30, 2008
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Businesses are generally quick to respond to worsening market conditions and one way they do this is to cut back on advertising spending. So if we want to guage the potential scale of the current downturn, the news from Trinity Mirror Group today is pretty bad…
Shares in the Mirror Group fell almost 30% today. The Times reports that the fall reflects the stock market response to a substantial recent fall in advertising revenues.
The steep drop in newspaper advertising is despite the significant promotion of price war campaigns by the big supermarket groups.
An interesting quote from Sly Bailey, CEO of the Mirror Group:
“We can’t defy the gravity of the advertising market, or the economy. All we can do is understand and react to what is going on, building our digital business and managing our cost base.”
I suspect that cost cutting will be the strategic response, and we’ll see this more and more over the next few weeks as the scale of the downturn becomes clearer.
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