Recession, what recession? Didn't Ron Zeghibe look smug last week
in that picture in the Financial Times? But then Maiden Outdoor's chief
executive had every right to be smug, having just announced a pretty
healthy set of financial results for the year 2000. And that wasn't all
- he was also predicting that this year will be a good one.
Zeghibe clearly likes to zig while others are zagging - wasn't it just
12 months ago that he was issuing a profit warning as everyone else was
gearing up for the biggest boom in a decade? And now Maiden is riding
high at a time when most other companies across all sectors are facing
the future with some trepidation. Take Capital Radio, which was moved to
issue its own profit warning last week.
City analysts have begun mooting a media industry 'bloodbath' lasting
not just one or two quarters but continuing across the whole year.
Worrying talk. And it's not too surprising to find many analysts arguing
that of all the media sectors, TV could be in for the roughest ride.
It's the biggest medium, after all, and it had an excellent year last
So it probably came as no surprise to a select number of agencies across
town when they realised that the bosses of ITV's two sales points were
both waiting in reception.
Yes, the ITV roadshow has hit town - and Mick Desmond, the chief
executive of Granada Enterprises, and Martin Bowley, the chief executive
of Carlton Sales, are doing a double act. They aren't visiting media
agencies - that could be constituted as a joint sale and therefore
illegal - but have targeted the top 30 creative agencies and are aiming
to reacquaint senior creatives and account men with the power of
television as a medium.
Which, on the face of it, would seem to suggest that ITV is taking the
threat of recession very seriously indeed. After all this is surely the
first time that anyone's felt the need to go out and actively sell ITV
since ... well, since the 50s probably.
Will it work? Can media owners come up with strategies to combat
recessionary trends? Or is this sort of thing merely cosmetic? Are they
actually powerless in the face of macroeconomic forces?
Bowley says that this is actually unfair - this marketing initiative was
planned months ago. He states: 'What we're doing is reconnecting with
the top creative agencies, which after all have the highest possible
contact with the client. If the brand leader isn't going to do this sort
of thing, then no-one else is going to do it for us. The response has
been extremely positive. We're reconnecting people with TV, the most
powerful medium in the world, with the agencies which create the most
powerful advertising in the world. They have been staggered about how
strong ITV is and we are able to tell them how they can be more fully
involved with the programming.'
But Bowley does admit that the initiative is timely. They're effectively
pitching TV against other media - and any business they can stimulate
will be more than welcome. He adds: 'What I would say is that if there
is to be a recession, not everybody will be in recession and for many it
will be an excellent time for people to grab extra market share and to
drive sales. I think Abbott Mead Vickers should be an inspiration to us
all. In the last recession when everybody was sacking people it decided
not to lay off one single person. Look where it is now. As in all
recessions the strong will survive and if there is any message at all
here it is that ITV is in a strong position.'
Fighting talk. Is everyone in the same combative mode? Well, sort
Neil Hurman, the ad director of national titles at Trinity Mirror, says
that the best way to combat the threat of a recession is to stop talking
about it. He also argues that there's not enough clarity of thinking
when people begin discussing this issue. 'You have to be clear about
what sector you are talking about and what comparisons you are making.
The national newspaper market, for instance, is not one single coherent
market. The broadsheets benefited massively last year not just from
dotcom advertising but also business-to-business and financial
advertising in general. There was complete lunacy around last year and
the broadsheets were never going to generate growth on that. But they
might generate growth on 1999 which is probably the more realistic
And Hurman is actually very upbeat. 'The truth is that, from where we
sit, the indicators are still strong. People still have jobs, they still
have money in their pockets and they are still prepared to spend that
money. It might be true that some advertisers are tempted to sit on
their hands for the next few weeks. But we haven't spoken to a single
agency press chief who says that clients are actually planning to cut
Others are perhaps more cautious. For instance, Graham Duff, the chief
executive of Zenith Media, is slightly sceptical about the ITV
He doesn't think they're targeting the right people for a start. And at
best, he argues, it will stimulate peripheral revenues. 'I think it's
generally admirable what they are trying to do. It is a case of proving
that no stone has been left unturned. But fundamentally, they are
looking at a shortfall running into tens of millions and this initiative
won't generate business to cover that shortfall. The real issues here
are macroeconomic ones.'
And you could argue that prospects for the UK economy look more than a
little shaky. A US slowdown will surely affect the UK sooner or later
and we will also have the added uncertainty of an election - probably in
June -and a foot and mouth crisis in the countryside. If company profits
start to evaporate, the first thing to be cut will be marketing budgets.
Surely no amount of brave talk can counter that - and some media owners
must know that in their heart of hearts.
After all, Capital's announcement was hardly upbeat, now was it? But
Nikki Mendonca, Capital's strategic marketing director, says there's
plenty you can do. She states: 'We have a hitlist of people who we think
could be using more radio - advertisers who are very TV biased, for
instance. Our aim is to show them what they would gain by redeploying
some of their budget on to radio - for instance, we're able to
illustrate increased cover and the ability to maintain your presence in
the market for longer. It's true that at a time like this it's hard to
get yourself to the top of their agenda and the only way you're going to
get anywhere is if you come to them with new news. But we certainly
believe we have a convincing story to tell them.'