If, back in 2007, you had tried to predict which two advertising companies were best placed to emerge most quickly from the recession, it would have been reasonable to guess billboard provider Lamar (LAMR) and web ad network server ValueClick (VCLK). But the reverse is true: Both companies' revenues remain well below their pre-recession peaks, and neither company has seen sales pick up significantly as the U.S. economy recovers. Among their peers -- ad agency holding companies large and small -- there has been a pronounced upward swing in revenues since the first quarter of 2010:
Outdoor ad company Lamar, as a provider of one of the few media largely unaffected by the disintegrating effect of the Internet, has a diverse base of large and small clients at both national and local level. As the economy grows, its clients' budgets ought to be filling Lamar's coffers. Lamar is growing a little bit now, but not enough to replace its losses from the good old days.
ValueClick is sitting in front of a tidal wave of new money as clients shift their dollars from old media to the web. As a pure digital play, it should have seen a dramatic uptick in revenues. Its sales are increasing, but not in the way you'd expect in a business where adspend is increasing by 16 percent a quarter.
It's a different picture at companies that offer a mix of old and new ad vehicles to clients, such as ad agency holding companies Omnicom (OMC), Publicis (PUB), Interpublic (IPG) MDC Partners (MDCA) and coupon giant Valassis (VCI). They seem to be taking the lion's share of increased ad budgets.
Note, also, that during the recession specialist agencies with narrow offerings tended to fare better than giant holding companies with a broad array of media offerings. With the economy recovering, the reverse now seems to be true: The generalists are doing better than the specialists.
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