The IPA’s Bellwether Report, which has tolled bad news for far too long, says marketing budgets were down again, and more sharply so, in the third quarter of this year. And it’s likely that, when the sums are done at the end of December, marketing spend will have fallen for a fifth consecutive year. Worse, marketers’ confidence – fragile at the best of times – has waned, with more marketers pessimistic about their prospects than at the beginning of this year.
For a cheerier view, the AA released its own report this week showing that adspend for the second quarter beat forecasts to grow by 3.8 per cent. The bad news is that the AA puts the boost down to advertisers pulling forward third-quarter spend. Mind you, the AA does try to end on a high. It reckons that subsiding inflation and a rise in real disposable income will strengthen adspend next year for the first time since the financial crisis.
So what does all of this actually tell us about the industry next year? The only thing for certain is the continuing uncertainty and the ongoing short-termism that has come to dominate so much marketing strategy.
One chief executive I met last week was feeling pretty good about his agency’s performance this year, until the diktat arrived from the headquarters about targets for 2013. He wasn’t surprised he’s expected to beat this year’s growth, but by that much? In this climate?
Smart agencies will be compensating for all this fuzziness by trying to win more business from existing clients. And the number of pitches this year that have been designed to cut marketers’ agency rosters suggests that plenty of clients are keen to comply.
Which all throws a new light on the role of an agency’s new-business machine and the tensions between chasing new clients and keeping current ones happy and, ideally, wanting more (page 16). Few agencies manage both with much consistency, though that’s sort of obvious by definition. Among all the new-business advice on how to pull this feat off, though, I refer you to Dave Trott’s blog on Campaignlive.
Trott advocates one sure-fire route to growth: winning creative awards. His argument goes like this: "The best people want to work at award-winning agencies. And the best people win more business, just because they’re the best." Of course, some agencies pile on new business without producing work that troubles creative or effectiveness juries. But they’re trying to fill a bucket that’s got a bloody great hole in the bottom. Trott’s got a point: do great work (that drives your clients’ business), win awards, attract talent, grow your business. I predict a healthy 2013 for all those agencies that win at our Big Awards next week.