OPINION: Stuart Elliott in America.(Ad agency level of optimism)

When it comes to the mood of Madison Avenue, is black the new black?

For months, a cautious optimism had started to pervade the offices of agencies across America as executives hoped that the struggling economy would pull out of its funk in time for 2002 to end on a high note.

There certainly were enough signs of improvement to suggest that this year would manage to finish ahead of 2001, when the industry suffered the after-effects of the largest percentage decline in ad spending since the Depression year of 1938. For instance, the demand for commercial time on the big TV networks ahead of the fall season, in what's known as the upfront market, was surprisingly strong, exceeding all forecasts. The total take set a record of more than dollars 8 billion - higher than even the all-time ad boom year of 2000.

Viacom, the parent of networks such as CBS and MTV, reported the best third quarter in its history, fuelled by better results in radio and outdoor advertising as well as in TV.

'In 2002, we are rocking big-time,' Mel Karmazin, Viacom's president, said, using language rarely found in a press release from a major American corporation.

That upbeat sentiment was being echoed by numerous agencies with clients spending aggressively in those media, in categories including automobiles, beverages, fast food, packaged goods and retail.

They're busily cranking out campaigns at a frantic pace reminiscent of the frenzied dotcom days, and some, such as Deutsch, actually have been hiring, not firing.