The US ad industry may not yet have hit the bottom of its current slump, Merrill Lynch has warned, with falls in ad revenue becoming steeper in recent weeks.

Blaming a “hangover” from September 11 for continued declines in adspend, ML analyst Lauren Fine revealed “A certain amount of paralysis still exists.” Although TV networks have witnessed a rise in demand for ad time recently, Fine pointed out that business is still well below this summer’s levels.

The firm estimates that newspaper ad revenue tumbled 11.5% in October, worse than September’s 9.5%, largely due to a fall-off in classified advertising, with help-wanted ads 40%–50% down at some papers during October and early November.

Broadcasters are also suffering. Local TV stations are expected by ML to see a 15%–20% year-on-year drop in ad revenue for November and December, with radio advertising predicted to be 10% down in December.

In an informal survey of fifteen major marketers conducted by ML, one-third said they would raise adspend next year, another third said they would keep marketing expenditure flat, while the final third said they would cut it by 10%.

News source: Wall Street Journal