EDITORIAL: Agencies adapt to new environment

After too long a time spent suffering the parsimony of Scrooge-like clients, Britain's agencies will be hoping for some Santa-like cheer as the new year approaches. Whether or not they can be confident of expecting something substantial in their stockings is hard to predict - presents there may be, but they're likely to be far from plentiful, without fancy wrapping and given only to those proving to be the most deserving.

The best that can be said of 2003 is that although business didn't get much better, at least it didn't get much worse. There's some optimism for 2004, although it's a dribble rather than a flood. The much-needed improvement in the US economy has begun, raising hopes that the severely depressed euro-zone will follow. What's more, the US presidential elections, the 2004 Olympics and the European football championships may act as catalysts for above-average adspend. But if these events combine to fuel a recovery, and it's a big if, what sort of commercial landscape will confront the ad industry?

Much will have changed permanently. The biggest mistake an agency can make is to breathe a sigh of relief and assume it can return to outdated business models.

One result of this may well be an increase in client promiscuity. Evidence suggests client procurement specialists are increasingly questioning of agency retainers, increasing pressure on marketing directors who find it harder to justify spending money unless the effect is accurately measurable.

The upshot may well be that agencies will have to take a less haughty attitude to services they've long dismissed as second-rate alternatives.

Chime Communications' Lord Bell is one figure predicting a significant diversion of client budgets into consumer PR, for example.

Meanwhile, there's seasonal cheer to be had from the fact agency phones seem to be ringing more often. Not often enough to suggest the feelgood factor has returned but enough to start laying future plans with a little more confidence.

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