I’d like to start this column with an apology - an apology for an
omission from the article about this year’s annual agency performance
league featured on pages 22-25.
For the first time since we began the series in 1991, the feature does
not contain words to the effect: ’Things are clearly not like they were
in the 80s’, which was a sort of financial and attitudinal health
warning we felt obliged to add for readers of a nervous disposition.
But I will be candid. The omission of the phrase this time round is not
an oversight on the part of Caroline Marshall, who has spent the past
two weeks with a wet towel wrapped round her head going over the
Rather, it is a deliberate attempt on our part to force the industry to
draw a line under the 80s. Not only are ’things clearly not like they
were in the 80s’, but they’re never going to be again, so there’s
absolutely no point in pretending that they might.
Now you may think that, coming in 1998, this is a bit unnecessary. I
don’t think so. The point I’m making is not that people don’t realise
the 90s are different - they do - but many of the ones I talk to think/
hope/believe that it’s only a passing phase. It’s testament to the power
of the myth that often, ironically, the worst offenders are too young to
have experienced the 80s but, nevertheless, either feel it beholden upon
them to look back or have somehow come to believe that they were very
much a part of it.
Why am I writing this now? Well, the short answer is that a superficial
glance at the profitability table suggests that in all the key areas,
agency finances are moving towards the levels they were in the late 80s:
aggregate income and profits are up by about 10 per cent; gross margin
on turnover is up to 17.7 per cent; and operating margin on gross income
is up by 0.5 of a percentage point. While this is all laudable, the
danger is that the industry allows itself to be deluded into thinking
that the good times (as in the 80s) are just around the corner. This
would be dangerous, for while agency finances may be returning to
’normal’, regardless of a possible recession, the business itself is on
the brink of a change caused by the digital revolution.
Quite what that change will be is hard to predict. But just as in the
80s, when the economy moved away from manufacturing (with all its
consequent effects on marketing communications), so in the next few
years the advent of digital means we will move away from a service
economy to one which is media-led.
And I can’t help but believe this will fundamentally change not only the
way agencies work, but also their finances - which is why pining for the
80s is a waste of time.
So be warned, or as a morose character in one of my favourite Calman
cartoons puts it: ’Nostalgia’s all right - but it’s not what it was.’