OPINION: Stuart Elliott in America

There's a joke about two psychiatrists who cross paths on New

Year's Eve. One exclaims: "Happy New Year!" The other one mutters under

his breath: "Hmmmmm. I wonder what he meant by that."

Perhaps he meant the opposite, "Unhappy old year!", which certainly

describes the annus horribilus that concluded ten days ago. The

recession, the dotcom implosion and the terrorist attacks on America

combined to produce for Madison Avenue the worst economy since World War

II, a phrase that no journalist who covers advertising could have

imagined writing 12 months ago when the industry was finishing the best

year it had ever enjoyed.

Now that we've shaken the confetti out of our hair - well, anyway, those

of us who still have hair - the question on everyone's mind is: "So when

is it going to get better?"

The short answer: don't ask. The long answer: if you have to ask, you

don't have a firm understanding of the problem.

The consensus of most industry analysts and forecasters is for a

recovery in ad spending to develop in 2003. That's right dear reader,

2003, as in the year after the nascent one we've just begun. If there is

any silver lining to the dark clouds, it's that the percentage decline

in ad spending this year is widely anticipated to be less than it was in

2001 (about minus 6.5 per cent).

That's scant consolation when you consider that there have not been two

consecutive years of lower adspend in the United States since the Great

Depression, when agencies endured four such years in a row, 1930-33. For

folks who pride themselves on a can-do spirit centred on always looking

ahead, it is bad enough to have to peer back 60 years, much less 70.

But tell that to the clients, those that are still in the mood to spend,

anyway. Or, to be more blunt, those that are still in business.

The drastic drop-off in customer counts in important categories such as

airlines, hotels, financial services, resorts, telecommunications and

retail has led to commensurate cuts in advertising and marketing budgets

which, in turn, have gouged huge holes in agency budgets. Most wounding

of all has been the fact that the companies in those categories were,

until months ago, among the fastest-growing and freest-spending of


Industry trade organisations are already trotting out the studies that

they commission during each recession, showing that advertisers who

maintain or even increase their pitching in tough times recover faster

when consumers start shopping again. The unusual circumstances this time

around - as a result of 11 September - make such direct comparisons

dicey, but hope springs eternal, particularly among the congenitally


To be sure, not every prediction is steeped in gloom. The dean of

American forecasters, Robert Coen of Universal McCann, is anticipating

an increase in ad spending this year from 2001, albeit a slight one of

2.4 per cent.

A Wall Street analyst, Michael J Russell Jr of Morgan Stanley, predicts

2002 will be flat compared with 2001, even going so far as to inject a

note of levity by proclaiming: "That puts us on the more positive side

of the coin, which is a sign of the times."

When the prevailing sign of the times is "Situation wanted", we'll take

what smiles we can get.


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