It's official. It's a recession. With so many commentators -
including the IPA with its glossy Bellwether Report - still dancing
round their handbags about what constitutes a recession and whether what
we're experiencing really is one, it's quite refreshing to hear Sir
Martin Sorrell being unequivocal in this week's feature on page 22.
Sorrell's view is that the classic definition of a recession as two
quarters of negative GDP growth is irrelevant and archaic. Today, he
says, recession is better defined as a sharp deceleration in the rates
On this basis, then, few would argue that recession is a more fitting
and appropriate term than, say, slowdown or downturn - the words
favoured by the rather more nervous observers. Ask any media owner about
a sharp deceleration in the rates of growth and, for once, the answer
will be a straight one. No matter that comparisons with last year's
once-in-a-lifetime, dotcom-inflated boom give a distinctly distorted
picture, the industry is not simply settling back into the 1999 growth
And, while there may have been a danger of talking ourselves into a
recession a few months back, now there's an inevitability about it and
it's time to publicly acknowledge the reality. All too often recently
the advertising industry has been forced into taking tough measures -
such as making redundancies - behind closed doors and then trying
desperately to play it all down publicly or, worse, resort to denials.
Instead of facing the enemy square-on, many in the ad industry have been
more likely to hide in the bunker over the past couple of months.
But with Sorrell's clear conviction and last week's news from
Interpublic Group's chief executive, John Dooner, that his company would
be slashing 10 per cent of its workforce following a 6 per cent fall in
second-quarter revenues, there is no longer anywhere to hide.
The real question is how agencies can work with recession-hit clients to
ensure that the current climate inflicts as little damage to brands and
brand communications as possible. However, both parties are better
insulated than in the last recession because of the shift to fees rather
than commission. Not only does it provide agencies with a certain
comfort blanket - more welcome than ever - but it ensures clients are
more likely to be offered innovative, cost-effective advertising
solutions. Hence, perhaps, the fact that the real sufferers so far seem
to be the big, old fat-cat media owners.