The World: Insider's View - Irish Republic

The Republic's economic success has been very good for advertising but agencies aren't laughing all the way to the bank, Shane McGonigle writes.

Ireland is only 70 years old as a state, it has the fourth-highest per capita GDP in the world, 30 per cent higher than the European Union average, and it has grown at four times the EU average since 1996. The country enjoys record low levels of unemployment; net immigration for the first time since the 70s; inflation under 3 per cent; disposable income of almost EUR18,000 per household; one of the highest home-ownership rates in the world and, of course, some of the greatest links golf courses, bars and brown bread on the planet. The statistics are dizzying, a gushing endorsement of success and enough to send politicians to the polls waving the facts like winning lotto tickets.

The ad market has jumped too, almost doubling to EUR1.4 billion since 2002.

But it's more than euros and bank balances that is changing. Culturally, the movement from field and farmyard to apartment and office block is mirrored in a changing mindset better able to evaluate the virtues of a good cappuccino than a church sermon.

The rise of secularism is obvious, too. Take Leo Burnett's recent campaign to promote the use of contraception for the Crisis Pregnancy Agency: a multimedia drive asking the Irish to "think contraception" achieved more than 80 per cent awareness within three months. The lack of opposition was notable - no pulpit speeches, no demonstrations, not even a letter to the editor. The line between Church and State has been clearly drawn.

On the media front, the legislators pondered that "wafer-thin liberalisation mint" for many years, subsequently indulged and the market duly exploded.

Twenty years ago, Ireland had two indigenous channels. Next month will see the launch of the latest local TV station to hit the market, Channel 6. Multichannel households will now have 15 channels to choose from, but that is indicative of the liberal approach of one of the most open economies in the world. This micro-isation of the mass media gives the agency and the client far greater scope to use traditional advertising in the mix even if the budget is limited.

The ad market might be worth EUR1.4 billion, but overheads are rising and margins are shrinking. Ireland's oldest ad agency went bankrupt along with several others, victims of the new reality of procurement and media specialists sinking their teeth deeper and deeper into the revenue vein.

A new agency model is emerging, forged in the fires of public procurement and bred in the belly of best practice. Leo Burnett is not even four years old in Ireland, but the young guns who missed the commission orgy are arguably better placed to commercially justify their profitable existence.

The future? Economically strong: the growth experienced in recent years is set to continue for some time to come.

- Shane McGonigle is the managing director of Leo Burnett in the Republic of Ireland.