MEDIA FORUM: What are the omens for media in 2004?

Is it the end of the downturn, or are the industry's runes readers just making it all up? Alasdair Reid investigates.

What's in store for 2004? Surely the very least we can expect is an end to all the gloom and doom that's been dogging the industry for the past couple of years?

If only everything in life was as reliable as that old theory about Olympic years being bumper years. In the US especially, the Olympic Games are usually seen as an excuse to add a zero (well, almost) to marketing budgets and any upturn in activity is usually given added momentum by the US Presidential election, which stokes up even more demand for television airtime. When the US market is buoyant, markets in Europe and Asia usually kick on too - and from a purely Euro-centric view, it also helps not just that the Olympics are being held in Athens but also that there's a major football tournament in Portugal beginning in June.

So, is it farewell to that old bathtub of a downturn we've been wallowing in of late? There are certainly pockets of undiluted optimism around but on the other hand it's not hard to find curmudgeons predicting nothing but continued gloom as well. Who's right?

Jerry Hill, Initiative's group chief executive, UK & Ireland, would certainly advise caution. He's not exactly pessimistic about the prospects for 2004, but he's not expecting a wave of euphoria either. "We're still seeing negative signs from the US economy and these days companies are adept at moving investment into areas where they will get higher rates of return.

Europe is a mature business area so in general you can't expect to see huge leaps of growth there. So, while I think stability is there I don't think we'll see the sort of bounce-back we might have seen at the end of previous downturns," he says.

But what about the broader challenges facing media agencies? Will we see continuing consolidation and restructuring?

Hill certainly believes that media agencies will be forced to ask themselves some fundamental questions. Iain Jacob, the chief executive of Starcom MediaVest, would second that. "Advertising and media agencies will continue to use language that has less and less meaning to anybody on the board of a company that actually needs to promote its products and manage a real business - look out for the new versions of 'media neutral planning', 'experiential marketing', '3D thinking' and other such gobbledygook," he predicts.

But in other respects, we might be getting back to basics, he reckons.

"By June most of the communication 'industry' will realise that the idea that television is becoming less powerful - fashionably articulated by so many - is, in fact, totally wrong. Conventional use of television to bore consumers into submission will indeed continue to provide disappointing results but clever use of interactivity, sponsorship, content, TV screens in shops and TV delivered to mobiles will be a resounding success for those smart advertisers willing to try it," he says.

Can it be true? Will television come back into fashion? Hopefully, Nick Milligan, the deputy chief executive of five, responds. In 2003, television's share of display grew but, as a medium, it hardly covered itself with glory. "In 2004, agencies and advertisers will experience a more united and engaging approach to the way in which television is marketed," he promises.

And he believes that Sky in particular will go from strength to strength.

"The Sky+ box is compulsive and will change the way people watch live television. Freeview will continue to grow and might well develop a pay-light offering. By the end of 2004, we should have 13 million multichannel homes, of which 92 per cent will be digital," he reckons.

In newspapers, surely the biggest question is whether there will be any titles still printing in broadsheet format by the end of the year. Lawrie Procter, the commercial director of The Independent and Independent on Sunday, argues that 2003 saw the most significant event in national newspaper publishing for more than a decade, with the launch of the compact Independent.

"I confidently predict that The Independent compact edition will go from strength to strength in 2004 as it rolls out across the UK. It will carry all before it, replicating the 50 per cent circulation increases already witnessed in Carlton and Granada," he asserts. And, he concludes, TV isn't alone in looking to revive its credentials as a "sexy" medium. "I expect the Newspaper Marketing Agency to continue the good work of 2003, with fantastic new pieces of research on female readership and advertising effectiveness in national newspapers," he says.

- "A lot of people are pitching themselves as ideas-based businesses these days but ideas need to be converted into execution. Some companies can bring ideas into the real world, others can't. Call me old fashioned but isn't that what people get paid for - actually doing things?" - Jerry Hill group chief executive, UK & Ireland, Initiative

- "I predict that David Connolly, Ofcom's TV adjudicator, will have an excellent summer holiday as most agencies and clients will avidly avoid having to ask for adjudication in the first place, let alone allow any dispute to drag on for any length of time." - Iain Jacob chief executive, Starcom MediaVest

- "Clients must learn to trust their media agencies again. There is no point in having ambitious, creative and strategic planning, if it is suffocated by the numbers. Few people take risks anymore and the middle man is getting fatter." - Nick Milligan deputy chief executive, five

- "With both The Independent and The Times growing sales and expanding the quality newspaper market through compact editions, I expect The Guardian and The Telegraph to react in some way, although both are playing their cards close to their chests." - Lawrie Procter commercial director, Independent.