With the economic pundits predicting the doom and gloom of a recession, 2008 looks set to bring financial hardship for many industries, but is adland worried?
We asked the cream of advertising's crop to gaze into their crystal balls and make predictions for the coming year.
While many are wary of the turbulent financial times to come, those who have ridden the wave of economic booms and previous recessions and the dotcom crash are experienced enough to realise the much-hyped "credit crunch" is unlikely to escalate into an economic Armageddon.
Instead, most of adland (with a couple of doom-merchants aside) predict a year that will see further convergence, exciting media and digital developments, and more big pitches.
As well as a continued blurring of the line between traditional and digital agencies, media also looks set to become a battleground for creative agencies.
But while some heartily support the likes of CHI & Partners' and Hurrell & Dawson's attempts to unite the two, the protagonists from the media sector warn that this trend will not gain the precedence that many have predicted.
Daren Rubins, the PHD managing director, warns: "Creative agencies have hankered for an in-house media resource for a number of years now, but most still struggle to attract and retain the best talent."
Tim Lindsay, the chief executive of TBWA\Group UK and Ireland, believes that this talent deficit will germinate through all advertising sectors: "With so many sexy and rewarding options out there in the broader media, entertainment and communications world, getting people to stay in advertising takes a lot of energy."
Agencies should also be prepared for more attacks, as the Government gears up to impose further restrictions on advertising. "It would be naive to imagine the pressure from government to restrict advertising in various categories will abate," Moray MacLennan, the IPA president, says.
Agencies will also need to drive "green" issues to the top of their agendas rather than just simply paying them lip service.
But despite these looming difficulties, adland remains optimistic.
The pervading belief is that digital will enjoy continued growth and an upturn in the number of clients that place it at the heart of their strategy, while digital campaigns will become increasingly interactive and personalised.
And although many bemoaned last year's lack of large pitches, Kerry Glazer, the chief executive of the AAR, is keen to point out this wasn't due to a huge decline in clients reviewing, but rather an ever increasing number of competitors, a view mirrored by those in direct marketing's corner, who remain sanguine about a fruitful new-business year ahead.
Surmounting the economic hurdles of 2008 will no doubt be a challenge. But as long as agencies can encourage their fretful clients to stay put by ensuring they spend more intelligently and effectively, this year could prove more fruitful than the last.
- Moray MacLennan IPA president; European chairman, M&C Saatchi
The first half of the year will flirt with recession. However, chief executives and marketing directors will hold their nerve, and their budgets, having learnt lessons from previous downturns. Meanwhile, it would be naive to imagine the pressure from the Government to restrict advertising in various categories will abate.
This will be counteracted with a unified voice from the Advertising Association and a positive campaign from the IPA championing the UK's creative industries. In the second half of the year, the economy will bounce back nicely from the recession, the UK will win a record number of gold medals at the Olympics and the year will end brightly with Barack Obama sitting in the White House.
- Maurice Levy chairman and chief executive, Publicis Groupe
I'll try to supply my own opinions and not a mixture of those emanating from our Groupe operations. So in all modesty, I must stress that I may be seriously wrong. There will be a slowdown of growth in the US (but I believe there will still be growth), but strong growth in emerging markets.
The Olympics and European Football Championships will fuel growth. Digital will become more core and central to many clients' advertising strategies. Social networks will be part of communication vehicles; much, much more targeted ads; and much, much more advertising as content.
As for new business, I believe we will have roughly the same level of activity in that field, 2008 will also be a huge year for green issues. Global warming, ecology, energy-saving programmes, ethical/equitable commerce, but also diversity, respect for cultures and for people will become central to clients' strategies.
- Daren Rubins managing director, PHD
2007 was a quiet year in terms of new business, so I have no doubt that 2008 will see an upturn in the number of pitches.
The big growth area for media agencies is in data analysis and econometrics. There has never been a time when so many boards are asking so many questions of their marketing teams - and media agencies are best placed to help them understand how their communications are working.
Outdoor will also see a renaissance, with digital formats allowing time-sensitive messaging.
The marketing community is increasingly reliant on agencies to create differentiation through insight and ideas and the procurement community is pushing for lower fees and better value. It is up to agencies to be more accountable and to quantify the value of good thinking.
- Jonathan Burley executive creative director, Leo Burnett
Digital - of fucking course (sigh at will). Ever on the ascendant, yet at the same time becoming more and more part of the offering from us "trad" agencies; not from the base human greed for getting in on the act, but from the realisation that it is a creatively exciting channel rather than some mysterious techy, magicky stuff that only the computer bods understand.
I see channel planning cosying back up to the start of the creative process, and context and content coming together at an earlier stage as the mentalist proliferation of channels gets out of hand. A "big bang" of screen-based media - screens on the sides of buses, at petrol stations, at supermarkets, fancy digital posters limping out of the train stations - which means we'll have to be both more broadminded and sharper when we define what we mean by outdoor, and smarter when we develop creative for it.
- Gavin Gordon-Rogers executive creative director, Agency Republic
In the digital market, there will be an increase in personalisation. Mobile/internet crossover will become increasingly common. Some brands will dismiss traditional media altogether in favour of a full-on, turbo-charged digital presence.
Many of Campaign's top ten viral ads in The Annual 2007 were TV work with an internet presence. I think creating standout pieces of entertaining film, which are not necessarily tied to any planning insight, such as "gorilla", for Cadbury, may well be set to grow in the coming year.
Semacodes, driving people to mobile internet sites for further information, will also start to become used more regularly in print advertising and on packaging.
Digital agencies will spend more time on internal projects or software development in the hope that some of these proactive pieces of work might be saleable to existing or new clients.
- Phil Georgiadis chief executive, Walker Media
2008 will be yet another year where we grapple with the relevance and relative value of different communication channels. The winners will be those advertisers who do fewer things better. Fewer ads, placed in fewer media executed with confidence and consistency.
Radio will struggle, but Fru Hazlitt will reawaken the sector. ITV will be the star performer in the world of television. Contract Rights Renewal will sadly be replaced with some other remedy.
Agency dealing will be under the scrutiny of the Office of Fair Trading. Those newspapers that execute the best multiplatform strategy will prosper. Digital outdoor will struggle to find its feet.
Magazine circulations will falter again and cinema will have to reach out to more categories to sustain its revenues.
Display online advertising will experience price deflation and start to offer effective competition to search as a means of acquisition. Advertising's death will be delayed by another year (again).
- Amanda Phillips chief executive, Proximity
I think this will be the year of big pitches for below the line. Last year was pretty quiet, but we all know that direct marketing is often one of the backbones to support brands when recession hits as it is cost-effective and targetable.
Last year, I felt there were a lot of agencies undercutting themselves to gain a "win". Maybe this will have an impact on the creative output for those agencies? My prediction is that clients will realise that you do get what you pay for. That might be nice.
The bun fight for talent will also continue. This is the biggest new- business pitch for agencies - how to attract the hottest talent into their agency.
- Mark Collier managing partner, Dare
There will be a much greater emphasis on measurement and analytics as clients look to their agencies to improve the effectiveness of the work. Linked to this is the issue of remuneration and profitability. We still have our work cut out to increase operating margins to the levels enjoyed by ad agencies.
The digital "land grab" will continue, with agencies from all sides jostling for position. If digital agencies want a seat at the top agency table, the onus will be on them to prove that they are the equal of their counterparts, particularly when it comes to the strategic advice that they offer clients. There will also be a change in the nature of the work. Digital is a multichannel medium and, as technology develops, it's becoming an ever more complex one.
Crucially, it's no longer just about advertising. It's about interactive content in the widest sense of the word.
- Neil Dawson founding partner, Hurrell & Dawson
In 2008, the widespread separation of the media and creative disciplines will continue to be a barrier to delivering the most effective solutions. In vain attempts to address this, ad agencies will bring media planners in-house and media agencies will lay claim to creative capabilities.
New and opaque labels will be crafted to disguise decidedly old thinking. The opportunities for agencies who are not constrained by the business models or ideologies of this separated world will be immense.
Rather than nervously looking over their shoulders at other more "quantifiable" and "scientific" industries, agencies will become more assertive about the value they create.
Environmental issues will continue their rise up the agenda from communications strategy, to organisational principle.
And finally, the use of lie-detector tests will become commonplace in agency credentials meetings whenever the phrase "single bottom line" is used.
- James Murphy start-up founder
The pain around the "credit crunch" will see clients reviewing budgets and could fuel an increase in bigger pitches. Agencies need to ensure clients don't cut spending but spend smarter.
Agencies had also better get used to new relationships with media owners as their increasing control of data and digital gives them greater influence on response-driven comms and creative.
The talent pool will merge. Artificial barriers between agency skills will increasingly fall as we all work together more to maximise client budgets.
This will be most fundamental in the fusion of media and creative talents. Having media at the heart of the creative thinking will unlock the frustrating divide between traditional and digital creativity that persists in London.
- Tim Lindsay group chief executive, TBWA\Group UK and Ireland
Life will go on pretty much as it always has, with agencies creating campaigns, grappling with integration issues, wondering how to get "engagement planning" in-house without pissing off their sibling media agency and/or holding company, stressing over their inability to get their clients to pay for this (duplicate) and other additional service(s), fighting a long-term losing battle with client procurement, and so on.
Pitches will not rise significantly, but this isn't a bad thing as there actually wasn't a significant downturn in pitches in 2007 versus 2006.
The major challenge, as always, will be to attract and retain good people. We're not very good at selling ourselves. But then the cobbler's child is always ill-shod.
- Jonathan Stead chief executive, Rapier
Clients prefer to call pitches when they are feeling at their most confident. Client confidence is currently likely to be lower for two reasons. First, their concerns around a decrease in consumer spending and second, and in my opinion of greater concern, their need to get to grips with changing patterns of consumer behaviour. I suspect that there will be a number of clients who call pitches in 2008 as a result of recognising that they are not changing their behaviour as fast as their consumers.
- Rob Forshaw founding partner, Grand Union
I believe that large new-business pitches will continue to be scarce and hard fought in 2008. It is a big year for sport, specifically The Olympics, and so it is likely that global business with an interest in this event will stick with their current agency.
Instead, agencies need to find growth through diversification.
The lines will continue to blur between digital and traditional agencies. Both will need to improve their skills to effectively compete. Clients will be less interested in a "digital perspective" in 2008, versus total communications planning. Digital agencies must upskill and ad agencies have one last shot at "getting digital" before the budgets and power shift.
If you are an agency who wants to set the agenda, then media will be crucial to achieving this.
- Kerry Glazer chief executive, AAR
Advertising new-business volume will remain comparatively static - a trend that we have observed for the past three years.
However, it might feel like there is less new business for agencies as there are more competitors chasing the available leads.
Big advertising clients (£15 million-plus) will continue to pitch their business in 2008; with constant pressure on budgets and the need to deliver ROI, clients will still opt to go to the agency market to find better solutions and, in some cases, cheaper deals.
The balance of clients wanting single discipline versus integrated solutions won't change: it will still be "horses for courses" depending on individual client need.
I also predict the volume of new business in the mid-budget (£5 million to £9 million) ad arena will continue to be depressed.
Overall, growth in new-business volume is much more likely to be seen in the digital sector where I think we might also notice an increase in international agency searches.
- Jill McDonald senior vice-president and chief marketing officer, McDonald's
The increasing credit squeeze, higher mortgage repayments and increased food and energy costs will dent confidence and change consumer buying habits.
But does this make it doom and gloom for business and brands in 2008? I don't think so. Economic slow down can create new category opportunities.
It becomes a survival of the fittest - if brands can reassert their core promise with renewed confidence and relevance, there will be plenty of consumers out there prepared to buy them. Relevant brands that offer customers a good deal - not just in terms of price, but also experience or quality, will win. With the return of some outstanding creative in the UK last year, maybe a dose of economic gloom will spur agencies and marketers on to continue to look at ways to make their money work harder, not just in terms of media and channel choice but also creative content and context.