ANALYSIS: COMMENT - Nostalgia may be all right, but it’s not what it used to be

I’d like to start this column with an apology - an apology for an omission from the article about this year’s annual agency performance league featured on pages 22-25.

I’d like to start this column with an apology - an apology for an

omission from the article about this year’s annual agency performance

league featured on pages 22-25.



For the first time since we began the series in 1991, the feature does

not contain words to the effect: ’Things are clearly not like they were

in the 80s’, which was a sort of financial and attitudinal health

warning we felt obliged to add for readers of a nervous disposition.



But I will be candid. The omission of the phrase this time round is not

an oversight on the part of Caroline Marshall, who has spent the past

two weeks with a wet towel wrapped round her head going over the

figures.



Rather, it is a deliberate attempt on our part to force the industry to

draw a line under the 80s. Not only are ’things clearly not like they

were in the 80s’, but they’re never going to be again, so there’s

absolutely no point in pretending that they might.



Now you may think that, coming in 1998, this is a bit unnecessary. I

don’t think so. The point I’m making is not that people don’t realise

the 90s are different - they do - but many of the ones I talk to think/

hope/believe that it’s only a passing phase. It’s testament to the power

of the myth that often, ironically, the worst offenders are too young to

have experienced the 80s but, nevertheless, either feel it beholden upon

them to look back or have somehow come to believe that they were very

much a part of it.



Why am I writing this now? Well, the short answer is that a superficial

glance at the profitability table suggests that in all the key areas,

agency finances are moving towards the levels they were in the late 80s:

aggregate income and profits are up by about 10 per cent; gross margin

on turnover is up to 17.7 per cent; and operating margin on gross income

is up by 0.5 of a percentage point. While this is all laudable, the

danger is that the industry allows itself to be deluded into thinking

that the good times (as in the 80s) are just around the corner. This

would be dangerous, for while agency finances may be returning to

’normal’, regardless of a possible recession, the business itself is on

the brink of a change caused by the digital revolution.



Quite what that change will be is hard to predict. But just as in the

80s, when the economy moved away from manufacturing (with all its

consequent effects on marketing communications), so in the next few

years the advent of digital means we will move away from a service

economy to one which is media-led.



And I can’t help but believe this will fundamentally change not only the

way agencies work, but also their finances - which is why pining for the

80s is a waste of time.



So be warned, or as a morose character in one of my favourite Calman

cartoons puts it: ’Nostalgia’s all right - but it’s not what it was.’



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