Editorial: Prudence a necessity as 'bloodbath' threat looms

The threat of impending recession, after the British economy shrunk last quarter for the first time in 16 years, is starting to have a palpable impact on the ad industry.

Sir Martin Sorrell's WPP, already one of the most tightly managed of the major marketing communication groups, has put the brakes on hirings until further notice. BBDO has also introduced a pay and hiring freeze.

Earlier this month, the IPA's Bellwether Report suggested that business confidence was at its lowest ebb in the survey's nine-year history. The Financial Times is poised to make about 60 redundancies, while Associated Newspapers could shed as many as 60 per cent of its 175 sales staff.

This trend is undoubtedly being mirrored in the agency world, albeit less overtly, as jobs begin to be axed. No more than a few at a time, perhaps, but worrying nevertheless.

Yet all this is nothing to what could happen during the first two months of 2009. Groups coming to the end of their fiscal year may be staying their hand on costly redundancies for now, but one agency head says he fears the early part of next year could see a "bloodbath".

Whether or not the seriousness of the situation has really registered is an open question. A recent story in Campaign prompted commenters on brandrepublic.com to make accusations of talking the business into a downturn, and industry events continue to act as host to queues of waiting taxis with names in their windows and meters running.

This kind of profligacy has got to be a concern. Revenue can't be controlled, but costs most certainly can. Yet there's a delicate balance to be struck. It's one thing to make sensible savings. It's another to be petty and small-minded by banning biscuits from the boardroom.

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