The year ahead for ... creative agencies

Nigel Bogle explains how a positive approach can see agencies through the economic gloom.

Nigel Bogle...group chairman of Bartle Bogle Hegarty
Nigel Bogle...group chairman of Bartle Bogle Hegarty

This is the third recession I have been through since we started Bartle Bogle Hegarty, but what makes this one very different to the others is the extent of uncertainty. Things have happened in the past few months that one would not have dreamed possible a year ago and I suspect there are more surprises on the way.

So, in looking ahead to 2009 and seeking to predict what life will be like for the advertising industry, it is hard to be precise. We know that consumer confidence is at its lowest level since NOP first measured it 34 years ago. We also know that there is no longer a robust correlation between economic indicators (such as company profits, consumer spending and GDP) and advertising expenditure in the UK, so looking in the rear-view mirror offers no certainty of the journey ahead.

What we do know is that volatility in consumer and economic confidence is going to impact directly on our business. Our clients will be looking for efficiencies, not least in their agency relationships. Just how tough it will get and for how long is hard to predict. It is often said that the best way to predict the future is to invent it and I think this is going to hold true for our industry in the years ahead.

Uncertainty is debilitating. It leads to anxiety, which can lead to a loss of confidence. This, in turn, can lead to panic, and the effect of panic, as we have already seen, can have catastrophic effects. The more we think recession, the more we get recession.

In my experience, confidence is a prerequisite for any successful business, but agencies in particular run on confidence and an unconfident agency will never perform at its best. It follows, therefore, that the answers to how best the industry manages its way through the next 12 months and beyond are first and foremost about mindset. So much of what is happening out there we have no control over, so we need to focus on the things that we can influence positively.

Thus, I feel the prime responsibility of agency management in these turbulent times is to instil a sense of certainty, positivity and confidence into the hearts and minds of staff and clients. This may seem a tall order when doom and gloom surrounds us daily, and I do not claim to have the blueprint for riding out recession, but I can share some principles that could be of use in helping navigate a way forward.

Direction. The businesses that I observe dealing best with the downturn are those that are rallying their people behind a clearly articulated agenda providing direction on how they will proceed in these extraordinary times. They are taking a proactive approach.

It is all too easy to duck beneath the parapet when the going gets really tough. Honesty is always the best policy and these businesses are being open about the issues most likely to cause anxiety and setting out what will define success in the coming year. People will then know where they stand.

At BBH, we have coined the mantra "certainty in uncertain times" as our rallying cry for 2009. We believe that, in uncertain times, people turn to brands, businesses and people they trust. As I said, we have been through recessions before and come out stronger, we have 26 years on the clock and we intend to use that experience to instil confidence and positivity. The mantra also inspires us to ensure we are certain about how consumer behaviour is changing so that our advice to clients is certain and sound.

Overhaul. Companies tend to make their biggest mistakes in the good times, so, after a long period of economic prosperity, the likelihood is that most agencies are in need of some overhaul, even if the good times blinded us to the need.

Recessions ask big questions of agencies, but many are good questions to do with speed, processes and costs. The challenge for agency managements is to be proactive and confident in answering those questions.

The subject of agency cost will be high on many clients' agendas. Now is an opportunity for the industry to create different, more entrepreneurial financial models that place significantly more upside on effective output even if time-based input is trimmed.

Now is the time to simplify ways of working and experiment with new approaches to problem-solving in order to place more emphasis on speed, given that agencies are frequently criticised for lack of pace.

And now is the time to streamline decision-making, an opportunity to have fewer rooms full of people with only the power to say no. 2009 will be about the survival of the fittest, so there can be no excuses for not being match fit.

New learning. Much has been made of the lessons learned from previous recessions about how best to manage brands in tough times, and rightly so. There are many examples of brands that have stayed on the front foot, coming out stronger as a result.

But this recession has made us all question things that were beyond question. Is your summer holiday booking safe? Can America's three biggest car manufacturers really be on the brink of collapse? Where is your money safest? In short, who can you trust any more?

Brands are all about trust and, quite clearly, attitudes and behaviours are changing by the week. Previous planning assumptions may no longer be valid. It is incumbent on the industry to be a leading source of new learning for our clients, to understand how best to maintain or rebuild consumer trust and how best to bind consumers to brands beyond pure price promotion.

Never has it been more important for agencies to face outwards, to be in tune with the mood of the moment, to be closer than ever to the commercial realities facing our clients.

The multi-faceted nature of most agencies' client lists provides a breadth of consumer perspective that most of our clients do not have. I find my clients are particularly keen to hear about what is happening in markets outside their own, so agencies should be leveraging this coalface knowledge on a weekly basis.

Creativity and innovation. Another difference between this recession and its predecessors is that the media landscape has changed fundamentally. The internet and mobile provide brands with new, lower entry cost opportunities, flexibility, tight targeting, fast measurement and accountability, delivered at speed.

That is not to sideline broadcast media, where great value will also be available. There has never been a better time to deliver big ideas more cheaply. And that is perhaps the most important point.

We shouldn't follow the industry mantra of "spend your way out" of recession - there is no guarantee size of spend will beat size of idea. The skill is in finding the optimum blend of pathways to the consumer that deliver cost-efficient messaging that sticks. We are ideas people, so let's make the most of this opportunity, as big ideas will be the strongest currency in the coming year.

Leadership. Choppy waters require a firmer hand on the tiller - more leadership, but leadership that liberates. Leadership that empowers those who live the values of the company, as the behaviours of those who lead will define the mood of the business. 2009 will be something of a battle for us all and, as someone once observed, an army has never been successfully managed into battle. It has to be led.

- Nigel Bogle is the group chairman of Bartle Bogle Hegarty.