There's a joke about two psychiatrists who cross paths on New
Year's Eve. One exclaims: "Happy New Year!" The other one mutters under
his breath: "Hmmmmm. I wonder what he meant by that."
Perhaps he meant the opposite, "Unhappy old year!", which certainly
describes the annus horribilus that concluded ten days ago. The
recession, the dotcom implosion and the terrorist attacks on America
combined to produce for Madison Avenue the worst economy since World War
II, a phrase that no journalist who covers advertising could have
imagined writing 12 months ago when the industry was finishing the best
year it had ever enjoyed.
Now that we've shaken the confetti out of our hair - well, anyway, those
of us who still have hair - the question on everyone's mind is: "So when
is it going to get better?"
The short answer: don't ask. The long answer: if you have to ask, you
don't have a firm understanding of the problem.
The consensus of most industry analysts and forecasters is for a
recovery in ad spending to develop in 2003. That's right dear reader,
2003, as in the year after the nascent one we've just begun. If there is
any silver lining to the dark clouds, it's that the percentage decline
in ad spending this year is widely anticipated to be less than it was in
2001 (about minus 6.5 per cent).
That's scant consolation when you consider that there have not been two
consecutive years of lower adspend in the United States since the Great
Depression, when agencies endured four such years in a row, 1930-33. For
folks who pride themselves on a can-do spirit centred on always looking
ahead, it is bad enough to have to peer back 60 years, much less 70.
But tell that to the clients, those that are still in the mood to spend,
anyway. Or, to be more blunt, those that are still in business.
The drastic drop-off in customer counts in important categories such as
airlines, hotels, financial services, resorts, telecommunications and
retail has led to commensurate cuts in advertising and marketing budgets
which, in turn, have gouged huge holes in agency budgets. Most wounding
of all has been the fact that the companies in those categories were,
until months ago, among the fastest-growing and freest-spending of
Industry trade organisations are already trotting out the studies that
they commission during each recession, showing that advertisers who
maintain or even increase their pitching in tough times recover faster
when consumers start shopping again. The unusual circumstances this time
around - as a result of 11 September - make such direct comparisons
dicey, but hope springs eternal, particularly among the congenitally
To be sure, not every prediction is steeped in gloom. The dean of
American forecasters, Robert Coen of Universal McCann, is anticipating
an increase in ad spending this year from 2001, albeit a slight one of
2.4 per cent.
A Wall Street analyst, Michael J Russell Jr of Morgan Stanley, predicts
2002 will be flat compared with 2001, even going so far as to inject a
note of levity by proclaiming: "That puts us on the more positive side
of the coin, which is a sign of the times."
When the prevailing sign of the times is "Situation wanted", we'll take
what smiles we can get.