PERSPECTIVE: Agencies must hold their nerve and ride out economic storm

What a delight it would have been to retreat into the warm and

gentle world of the historic Shell posters adorning the walls at the

History of Advertising Trust's 25th birthday party this week. Their

proud proclamation that "You can be sure of Shell" and their vibrant

evocation of an England now gone for good are a reminder of how art and

commerce once perfectly blended in advertising as self-confident as it

was visually stunning.



How many of those mingling atop the Shell Centre on London's South Bank

must have wished today's battered and beleaguered ad industry could roll

back the years to a time when advertising was so sure of itself and its

future.



America's tragedy and traumas have turned the global ad market's

hairline fractures into gaping cracks. If it goes ahead, the deal that

is expected to result in WPP - whose chief executive, Sir Martin

Sorrell, was the HAT's guest of honour - buying Tempus to boost the

group's media buying firepower may be the last of its kind for some

time.



Bob Willott, the editor of the industry newsletter Marketing Services

Financial Intelligence, predicts that any further consolidation of the

industry may be on hold for two years as predator groups become

preoccupied with safeguarding their bottom lines.



At the HAT party, the bewilderment was palpable. How was it possible,

asked the senior executive of a major poster contractor, that his

company had been forced to follow its best-ever set of results with a

profits warning.



Others were ruing the day they chased the dotcoms' fool's gold. One

agency chief executive looking to move offices said the dotcom illusion

was brought home to him when he was shown around a lavishly appointed

former dotcom company HQ vacated so suddenly that half-filled coffee

cups were still on the tables. The result is a lot more chastened

agencies who may think twice about overlooking those boring but

supportive clients that stop the roof falling in. "People may stop

flying," a senior executive of an agency with a large FMCG client base

told me. "But they won't stop washing their clothes or wiping their

arses!"



What's clear is that the industry's problems were exacerbated but not

caused by the events of 11 September. The fact that Abbott Mead Vickers

BBDO has made staff redundant and M&C Saatchi is thinking of doing so is

because of a steady erosion in corporate confidence which only now

threatens to spread to consumers. The good news is that no agency is

reporting a collapse of client confidence in advertising. The bad news

is that, with airtime demand down, advertisers are prepared to wait in

the expectation of paying less for it.



As postponements turn into cancellations, it will take all the agencies'

persuasive power to convince clients to hold their nerve and keep their

budgets intact. Suddenly, the age of innocence has never looked more

alluring.



- Caroline Marshall is away.



Topics