As the US economy continues to slow and the trickle of 2001
new-business opportunities seems likely to dry up altogether, nerves are
starting to fray among London's advertising community. Away from the
sweaty palms of Soho, however, the ad market in northern England appears
to be deflecting fears of a recession far more effectively than that of
The Daily Telegraph reports that the ad revenue flowing into its coffers
from Manchester is remaining buoyant, in contrast to the experience of
newspaper sales desks in London. Media agencies, too, point to strong
performances from their regional branches. 'Northern markets are pretty
vibrant at the moment,' MediaVest's chief executive, Jim Marshall,
'MediaVest Manchester is certainly performing successfully.'
This admirably robust performance from regional ad markets seems partly
to stem from the fact that a significant number of their clients are not
directly linked to the flattening Stateside economy.
The big American multinationals, which tend to operate out of London,
are becoming more cautious in both their spending and review
Budgets are already being redivided, with above-the-line advertising
taking a far smaller share of the pie.
Agencies north of the Watford Gap traditionally refute suggestions that
their clients are more locally focused, and thus less likely to require
the full-service global offerings of their London counterparts. However,
it remains the case that, though northern agencies often have some
national or international business, their client portfolios will usually
include a large number of more regional companies. Ultimately, these
organisations' budgets are less likely to be defined by what happens in
New York, and more likely to take their lead from the still positive
noises being made around the British economy.
'As you get further away from London, the businesses that work with
regional agencies tend themselves to be more regional and more linked to
the local economy,' TBWA/Europe's chairman, Paul Bainsfair, explains.
'This in turn gives more protection to the north.'
'The UK economy seems to be holding up OK, so local business or European
business continues to be quite healthy,' Marshall adds. 'That could mean
northern agencies are holding up better.'
However, it is not simply the case that northern agencies can look to
more buoyant spend from their existing clients. Companies wanting more
accountability for their increasingly strapped cash may look to northern
shops as the best equipped to provide it. Duncan Slater, the strategic
development director at Attik, points to the social economic history of
Manchester, which built itself around the cotton industry following the
industrial revolution, as spawning a specialism in retail in the
Now that clients need to rely on keeping their activity more direct and
targeted, such specialisms could put Manchester agencies in a good
position to reap the benefits of London belt-tightening. 'Clients are
finding that other disciplines, such as direct marketing and niche
offerings such as trade sales promotion, have a very valid role to play,
particularly since they're so measurable,' David Bell, Cheetham Bell
JWT's chief executive, says.
Bainsfair agrees that London's strength has traditionally lain in
above-the-line advertising, but that a different marketing mix emerges
away from the capital. 'In busy provinces, agencies have historically
been much more integrated and likely to get involved in all aspects of a
client's business,' he says. 'Consequently they're less exposed to the
nervousness we're experiencing in London.'
Then there's the issue of costs. 'The north has always been a more
cost-effective alternative to the south,' Bell argues. He cites the talk
of recession and ever-shrinking ad budgets as reasons why clients might
be finding it more attractive to employ a northern agency.
Other obvious factors in their favour are the reduced overheads and
cheaper geographical locations. 'If you can swallow your pride as a
client - if that's the way they see it - you get cheaper bills and
better service elsewhere than London,' Slater says.
Another major factor in the north's apparent buoyancy is the decline in
the dotcom market. Most of the London agencies invested significantly in
the plethora of dotcom start-ups, which often went out with a very
expensive whimper. Len Sanderson, the managing director of Telegraph
Sales, believes that, in the final analysis, the north's relative
success in 2001 is due to the prosperity experienced in the south last
year. 'There was a huge amount of dotcom and corporate finance
advertising then, which tends to be centralised in London,' he says,
adding that, in a year-on-year comparison, 'the north is only continuing
as it was before.'
In the current ad climate, however, stability is nothing to be sniffed
at. With bigger London agencies holding more multinational clients than
their northern counterparts, the effects of economic slowdown were
always likely to be felt first in the south. However, while the British
economy repels a full blown recession, the northern ad market is likely
to retain its current lustre.