Opinion: Perspective - Future is not completely bleak for advertising

It was perhaps one of the least surprising headlines of recent weeks: "Marketing budgets cut at record rate as economic crisis deepens." It was always a matter of not if but when.

So the IPA's latest Bellwether Report has found confidence among marketers lower than at any other time in the report's nine-year history. And it marks the fourth consecutive quarter of decline.

All main media, PR, sponsorship and research are taking a hit as clients retrench. Sales promotion and DM budgets fell less sharply, but even the web is stuttering: growth is simply steady (where before it's always been steep) and only search is showing any real increase, though that is only described as "marginal".

The Bellwether's author, Chris Williamson, the chief economist at Markit, reckons the report's findings "indicate a severe worsening of business confidence", though, let's be clear, they still only "raise the possibility" of the country falling into recession.

It's not entirely bleak. Apparently 12 per cent of companies surveyed are revising their budgets upwards. It would be nice to know a little more about who these marketers are and how they are justifying the increase, because inevitably (as here) the focus is fully on the slashers rather than the investors.

According to analysis by Ebiquity's media monitoring division Billetts, pharmaceuticals companies and entertainment brands have been beefing up their budgets in recent months as we all nurse our debts with a drugs and distraction salve.

Meanwhile, unsurprisingly, finance, cars and utilities have been curbing spend, although Procter & Gamble has been the biggest cutter. P&G's adspend was down by more than £16 million between June and August, even before the real financial crisis bit. Yes, as the biggest advertiser, its cuts will be proportionately higher, but the message its retrenchment conveys is clear.

Of course, in all of this recession talk, there is some good news for advertisers: media is getting cheaper as demand tails off and apparently TV airtime is at its cheapest for 15 years. It's incumbent on media owners now to drive that message home and do their bit to encourage clients to keep spending.

The IPA has worked hard to underline the long-term wisdom of continuing advertising investment through a downturn, but it's not at all surprising to see so many marketers following their gut and putting on the brakes.

In a recession, business people are rarely given the grace to take a long-term view without some immediate and demonstrable action and chief executives get fired for short-term decline. Quarterly or even monthly budgetary reporting has, even without recession, become more common and the "long-term view" has become all but obscured for many companies. Proving the payback of advertising has never been more vital. But for all the effectiveness papers illustrating the benefits of continued advertising spend through a downturn, the actions of companies like P&G speak louder. When the most marketing-literate of companies trims its budgets, other clients will read a lesson.

So Beattie McGuinness Bungay won't be heading back to TBWA. The advertising industry needs a rich entrepreneurial vein, so it's good to see one of the most successful start-ups for many years retaining its independence for a while longer yet.

And it seems that the existing TBWA management have been given a renewed vote of support by their global paymasters, so the disenfranchisement of recent weeks may be fixed.

Now the appointment of a world-class creative director - surely a little more difficult after the tumult of the past few weeks - will be absolutely crucial if the agency is to regain the sort of momentum it was beginning to display.

Meanwhile, there's no doubt that the next few months will see a scramble for survival that could throw up some interesting new alignments as the talent shortage meets the cold wind of recession.


You have

[DAYS_LEFT] Days left

of your free trial

Subscribe now


Our new premium service offering bespoke monitoring reports for your company.

Find out more

Become a member of Campaign

Get the latest news and insight from Campaign with unrestricted access to campaignlive.co.uk, plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now