Media: Why this recession is turning out to be so unique

In the first of a two-part look at the downturn, Chris Ingram argues that we are witnessing a fundamental shift taking place.

Understandably, in this deep recession, many are looking for some form of return to normality. Certainly, there is a feeling of relief that things aren't as scary and out-of-control as they seemed post-Lehman last autumn. So stock markets have bounced and some consumers are starting to spend again - albeit carefully.

But this patient has had a very serious operation, which means it needs careful nursing.

I produce something called "Recession Watch" to keep an eye on what I regard as the real-world indicators to help read the shape of this recession. Without going into the details, my work leads me to some stark conclusions.

First, you have to think that this is the new normal. You will be doing yourself and your company a grave disservice if you are waiting for things to change back to how they were.

Unlike any of the five recessions I've seen (using an ad revenue definition), this one is different. People have been really scared and scarred by this one in the same way as people were by the Second World War and its threadbare aftermath:

- A sizeable proportion of the population will never use debt again.

- Some have learnt to enjoy making do - needing less; doing things themselves; being more self-sufficient (as a war-time baby, I find it extraordinary to see once again the demand for allotments massively outstripping supply).

- Eating at home, eating together as a family and the related interest in cooking and in basic ingredients are all on the rise.

There are other examples of a dramatic shift in attitude and, yes, for some people, this will be transient. Hedonism is not completely dead, and hubris is still alive and well in some quarters. The trick, as always in our business, is to separate the fads from the trends.

However, the reason why we are going through a fundamental shift is not just because of the recession, it's because three forces have come together at the same time and are feeding off each other.

They are recession; environment and technology.

The concern with environment, global warming and the world we are leaving for our children fits perfectly with the current mood of the recession in which people are often incredulous about how they borrowed and how lavishly they spent money on often unnecessary things only two years ago. So avoiding all forms of waste is now not only good for the planet, but also saves people money and they feel better about it.

When it comes to a whole range of consumer-spending decisions, people now say "why?" whereas before they said "why not?" This is a fundamental shift, whose effect on consumption patterns cannot be over-emphasised.

Finally, there is the influence of technology - digital technology. Of course, we have known for some while that it has had a growing influence on the way we shop, the way we communicate, the way we learn, the way we are entertained and, not least, the way we work. Billions of words have already been written on this subject.

But, in a deep recession, everyone is looking for efficiencies and basic cost reductions, not as a one-off, but again and again. This is where digital versions of existing services have had a huge advantage. However reactionary people are, and whatever the vested interest of various groups - and departments in companies - in this climate, it is almost impossible to deny tangible benefits such as these.

Old relationships and traditional ways of doing things are under huge pressure now if they don't tangibly compare with digital alternatives and/or differentiate themselves strongly (see my strategies for small and medium-sized enterprises listed in the box).

You may say this is totally irrelevant to you if you are sitting in an established advertising company of several hundreds or thousands of people. You will be wrong.

The lifeblood of developed economies is entrepreneurs and SMEs - they employ 13.5 million people in the UK and account for 51 per cent of the private sector turnover.

The best grow faster, are more agile and adapt faster than big companies. It's why big companies are always trying to buy them - and nowhere is that more true than in adland where there are now almost no independent medium-sized companies, just huge groups and small independents.

Despite how it may feel in advertising and marketing services, the bosses of big companies are constantly on the search for how they can make their companies as innovative as small companies.

So, in many respects, small companies can show the way.

But even disallowing the effect of big companies following this trend, these apparently tiny decisions multiplied hundreds of thousands times affect whole industries: paper and print; logistics; property; construction; telecoms and, yes, media and advertising.

Next month: What does this mean for adland?

- Chris Ingram is the founder of IngramEnterprise.

BUSINESS TIPS IN A RECESSION

I run a small enterprise that invests in and helps others. Moving offices recently, I noticed there was plenty I could do to cut my overheads:

Who needs stationery? Almost all contact is electronic now or face-to-face. The only stationery needed was a business card, which, let's face it, is really a "new-business, business card".

Who needs a long lease? The property market is going to take years to recover, so I pick up the tail end of leases or contact friends at big corporations who are happy to rent out spare capacity and provide the equivalent of a serviced office at very attractive prices. They get some marginal income. I undercut the market by 40 per cent.

Who needs meeting rooms? When I left Tempus and was on gardening leave, I got into the habit of using smart hotel foyers and Caffe Nero; now I've joined a club and, with lots of others, use it as an extension of my office.

Who needs landlines? In my office at home, I've just cancelled my landline because I was using my mobile almost exclusively. For many, business is done on a mobile and not in an office with all its fixed costs on landlines.

Who needs money? OK, I exaggerate to make a point, but the incredible difficulty in accessing funds is making some sections of the business community think differently. They have to do business without borrowing. Several companies I deal with are now actively involved in bartering their goods and services. They're doing it legitimately, but often very creatively - and I'm learning a lot!

Who needs PAs? The increasing demand for a 24/7 service makes it tough for the traditional secretary in a support role. Once you've got yourself a BlackBerry, PAs become partly excluded and are having to play catch-up too much of the time.

Who needs employees? I know this sounds brutal and most businesses need a strong team at the heart of their organisation. But how many? Really good people are now available part-time or on a project-by-project basis. Some choose this way because they like the freedom it gives; some do it by necessity in this tough climate. Either way, it is significantly more economical for the employer and eliminates almost all HR issues, which are a huge hidden cost.

Who needs to advertise? Small companies barely think about the classic media of TV, newspapers and magazines. They tend not to think enough about marketing anyway, but if they do, they're thinking of upgrading their website; boosting online sales and services; spending on search; using online business networks, and so on. By the way, our ad for project managers went into an online version of one of the national papers and pulled 110 replies in four days at a fraction of the cost of the print version (now that's a subject in its own right).

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