Comparing the change in total advertising spending to the change in gross domestic product (as seen on cover) over the past quarter century shows that the two move roughly together. What is of interest is how much media spending has dropped relative to GDP in the last business cycle, with 2001 showing the widest falloff. The gap is only rivaled by the increase in spending during the mid-70s boosted by a combination of election spending and the bicentennial. Today, what is promising is how much ad spending has improved in 2002, with both broadcasting and cable reporting improved demand. Better yet, the percentage of total ad spending for cable has increased steadily just as total ad spending has fallen, perhaps indicating a pent-up demand for cable. Early results are promising, as revenue is returning across most dayparts to cable. Does this mean the slump is over? Probably not. But maybe a bottom is at last here.

For complete analysis of advertising revenue see ?Broadband Advertising? at www.kagan.com.

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