Jitters over the economy sliding into recession is being felt in the advertising industry, said media experts and representatives.
Second-quarter earnings reports from some of the largest media houses, including Viacom, CBS and Walt Disney, showed little growth in ad sales and losses in many local sectors.
CBS' President-CEO Les Moonves made an open acceptance of the harsh reality and alarmed the investors by saying: "We are clearly challenged by the economic conditions affecting many industries, particularly as it pertains to our local businesses."
CBS saw just one per cent increase to $3.9 billion (Dh14.3bn) in total revenue over the second quarter in 2007, with TV revenue up two per cent to $2.2bn despite a 2.9 per cent decrease in CBS network ad sales.
Their radio waves took an even deeper cut and in the midst of a digital overhaul by merging with AOL's radio player, saw a nine per cent decline in revenue on a same-station basis.
The only medium that came to the rescue of CBS is also the fastest growing in the UAE – the outdoors.
Their outdoor division increased by eight per cent to $598 million.
With concerns increasing over how to battle the decline in revenue and profits, CBS is banking on digital to drive growth.
Their recent acquisition of CNET in May is a clear indication of their fiscal reality.
Reinstating their confidence on the fastest growing medium of interactivity, Moonves stated the company's goal to reach $1bn in interactive revenue within the next three years, based on this year's mid-$600m figure.
Foreseeing this major growth in the sector, CBS interactive division will become its own separate segment beginning in the third quarter. "When we do, you will see just how big a part CNET's many global destinations and users play in our newly expanded interactive business and how central it is to achieving our growth goals," Moonves said addressing investors.
Long established entertainment and media house Walt Disney also saw a similar digital boost in internet broadcasting revenue, which increased $7m.
CEO Bob Iger cited last year's acquisition of Club Penguin and increased sales for ABC's digital media.
However, for Walt Disney, the concern is not a worry as its dependence on advertising revenue is limited to just one-fight of its total revenue.
Iger did address the recession issue and pointed its effects on Disney's ad business. "We have detected a weakness at the [ABC] stations and ESPN, particularly with cars, financials and consumer electronics. Advertising is only 20 per cent of our revenue, so we are not as exposed to the ad climate as our media peers. We have almost no ad exposure outside the US."
In a desperate attempt, politics seems to be coming to the rescue of large media corporates as they relaxed their policies on accepting political advertisement in the year of the presidential elections.
Theme channels such as Disney or Discovery may not get the piece of the pie, but others are vying for the political dollar with a glee.
Viacom, which saw a meagre one per cent increase in ad sales in the second quarter, recently relaxed the policy on accepting political ads at its flagship cable brand MTV. Viacom CEO Philippe Dauman is quoted in the media as saying: "It's not a huge opportunity for us, since most political ad buying is on local media.
"But it is an opportunity which we are taking advantage of. And particularly for a demographic that's very interested in this year's presidential election."
In an all-out effort, Viacom is not leaving anything unturned and is looking to other categories to pick up the slack in the third-quarter "scatter" market, or when marketers buy ads on an as-need basis, which is showing early softness.
"We are taking different steps to address it by introducing new advertisers to replace the ones who dropped off over the past couple months," Dauman said.
"Given the state of the economy, it is hard to predict. But we are aggressively out there, trying to make the best of the ad dollars that are available for us."