There's still a long way to go in the current financial downturn and prudent media businesses will not get too carried away with any talk of an immediate recovery, according to Lorna Tilbian, executive director at Numis Corporation.
The media analyst of 25 years knows this is not what media owners, agencies or their clients want to hear, but her first-hand experience of three financial cycles, together with one of the strongest track records in the City, makes her warning difficult to ignore.
It follows tentative signs of growth in some pockets of the UK economy, leading to claims the historic low interest rates of 0.5% and £125bn bailout plan have served their purpose and kick-started the road to recovery. But Tilbian remains sceptical.
"We expected the massive interest cuts and unprecedented stimulus would lead to a rebound," she says. "But I'm not sure the recession is over.
"In a sense, the banks have been saved from themselves, so the financial Armageddon looks as though it has receded. But actually it looks like we still have an old-fashioned economic cycle to get through."
A full cycle, according to the analyst, used to consist of "six years of feast, two years of frenzy and then three years of famine". But this time the cycle was cut short by two years, with the UK stockmarket peaking in the summer of 2007. Tilbian attributes this premature climax to "the impact of globalisation and the internet".
"We have reached a stage where there's a bit of a feel-good factor, but I think it could well be a suckers' rally," she warns. "Globalisation and the internet may have sped things up, but it has spread the greed and avarice, and all the toxic assets. It doesn't mean it cures the downturn faster."
Instead, the seasoned leader of Numis' media research team, ranked in the top three for its analysis of UK media companies since 1987, believes financial markets will begin to recover in Q4 2009, with a real-world recovery not before autumn 2010. This is decidedly less upbeat than other industry forecasts and three to six months later than WPP's chief Sir Martin Sorrell.
Tilbian was recently named the 19th most influential person in media by The Daily Telegraph and earlier this month she had 170 industry leaders hanging on to her every word at Media Week's Media 360 summit. After her presentation, she was inundated with business cards from delegates wanting more: never has financial analysis been so highly valued.
"The elephant in the room is unemployment, which is always a lagging indicator," she explains. "The consumer might have more money in his pocket, but companies are still finding it tough to borrow for less than 8% - this is not a prerequisite to growth, so they are letting people go."
Boom and bust
A self-confessed fan of Margaret Thatcher, Tilbian made her first advances in investment banking in the boom and bust '80s, becoming SG Warburg's first female director in 1988. Her advice to media companies battling with falling revenues is pragmatic but brutal.
"Cut [jobs] early and cut hard," she says. "Do not ever, ever have too much debt on the balance sheet. You want a strong balance sheet to mask the vagaries of profit and loss. Don't do lots of wishful thinking, so you wait, wait and wait, and then it's too late."
But what about the value in nurturing your talent and positioning yourself for the upturn? "It's a great luxury to have staff and resources on tap," she says. "But if they are not being used, then you might not get to the point where you come through the other end."
Educated at Cheltenham Ladies' College, it might surprise some to learn that media's most high-profile finance specialist holds a BA honours degree in English and History, as well as a teaching PGCE from Southampton University. But it is her experience at Warburg during the 1989 to 1992 recession that she now draws much of her inspiration from.
"Back then, peak-to-trough classified advertising fell 39% and display ads fell 11% - but this time we're seeing multiples of that, with classified down more than 60% and display down more than 20%. The difference, which people forget, is that there was rampant double-digit inflation then."
Another game-changing difference between then and now, says Tilbian, is that last time it was all cyclical.
Death or glory
Today, as some companies are already painfully aware, structural issues are challenging certain media, and traditional revenue streams may simply not return, echoing the shifts experienced by B2B companies at the start of 2000.
Numis now labels the newspaper business as "death or glory" stocks and Tilbian admits she would not advise anyone to invest in any business where the financials are a risk - effectively ruling out Johnston Press, Trinity Mirror, Independent News & Media and many more.
However, her old friend Rupert Howell, who used to be a client when he led Chime Communications, will be pleased to hear she believes ITV's problems are "largely cyclical" - because "in years to come, mass audiences are going to become rarer and therefore more expensive".
The first green shoots may have been trampled, but Tilbian says a downturn is "one of the greatest times to build a business": "You can get good people without having to pay up and it's a great time to pick up distressed players and focus on innovative revenue opportunities." Her parting message: "Keep calm, carry on."
Casualties: With the exception of Yell, I believe we will get through the cycle without any major players going bust.
Sir Martin Sorrell: He doesn't have the perspective we have from a distance. We were looking at a 5% downturn when things went bad last year, but he was looking at 2% - he's only just adjusted. If you're an entrepreneurial businessman, you're optimistic by nature. Pessimism doesn't build empires.
Emancipation for women: We thought this was progress, but now we realise it was great progress towards paying for your own dinner. Having it all means doing it all - it's bloody knackering. You can't have a family and build a bank. You shortchange both and, worst of all, you shortchange yourself.
The BBC: The BBC is distorting the marketplace. It is subsidised to the hilt and everyone else is regulated to the hilt - that combination makes it hard for commercial players to compete. The BBC's step back from developing hyper-local websites was a victory for commerce. It should focus on the "inform and educate" part of its remit and not compete head-on.
2001 Executive director and head of media research, Numis Corporation
1995 Executive director, Panmure Gordon
1988 Director, SG Warburg
1984 Agencies analyst, Sheppards & Chase
Marital status Divorced
Favourite media Harper's Bazaar, Financial Times, The Sunday Times, LBC radio and BBC.co.uk
This article was first published on mediaweek.co.uk