Radio annual and television yearbook (1952)

ADVERTISING OUTLOOK— 1952 By FREDERIC R. GAMBLE, President, A.A.A.A. R Gamble WHAT is the year's outlook for advertising volume, and hence for radio and television billings? The new year brings a number of reasons why there should be no letup in advertising effort — but rather a stepup. While many companies have reported increased sales, they have also shown a considerable decline in their net profits; they will need to increase sales even further to maintain profits in the face of higher taxes and higher break even points. We have seen continued buyer resistance in a number of lines that are still in ready supply. There is still a considerable accumulation of inventories in distribution channels. We are hearing concern, already, whether industry will successfully adjust from defense production — whether we can find customers over the next few years for a vastly expanded output of goods and services without some degree of recession. Whether or not there will be a substantial increase in advertising effort will be at the decision of business management. And it will depend to a large extent on advertising agencies. Agencies have the job of convincing business that the results will justify aggressive advertising activity. In the midst of high costs, their advertising plans must be still more effective. They will need all the help, ammunition and cooperation that media can give. Among media, it seems to me that broadcasting faces the year's opportunities with some new assets to its credit. There is the recomposition of the national organization, as the NARTB, under new leadership. And there is the reconstitution of Broadcast Advertising Bureau, with an organized sales program and under new leadership. There is also the reconstitution of Advertising Research Foundation, as a fully tri-partite organization open to broadcasters and other media as participating subscribers. Given strong support by broadcasters, there is machinery here to do broadcasting research that has recently been much agitated for. There has also been a healthy tendency, in broadcasting, to review time and talent costs in relation to general program effectiveness. It is healthy and fore-armed, I think, because advertisers will be increasingly cost conscious about all media during 1952. At the same time, there are places in the broadcaster-agency relationship where we are still surprisingly weak. We must strengthen our business relationship— in such fundamentals as rate cards and contracts, to facilitate time buying — in improving station billing practices, in speeding up collections and in warding off credit losses. It should be a cause of serious concern that the credit losses by broadcasters have been far, far higher than those of any other media and bad in comparison even with most other industries. Now, when advertisers are up against material shortages and the other difficult factors of a semimobilized economy, business failures can come most unexpectedly. There are several ways to guard yourself against credit losses on general advertising. First, you can make sure that the advertising agencies which you "recognize" are sound financially. This means that the agency should have financial integrity, collect promptly from its clients, pay media by their due dates and have enough capital on hand to meet emergencies. You can determine agency financial capacity by reviewing the agency's balance sheet. There will soon be machinery in broadcasting, we hope — as maintained among other major media — to collect such facts about agencies for the information of individual stations. Second, you can be prompt and meticulous in submitting your invoices and affidavits of broadcast. Agencies tell us that many invoices from broadcasters are lave and some are inaccurate. Third, you can install the payment stimulus and credit safeguard that is in effect with majorities of other media — the customary 2 per cent cash discount. 43