Posts tagged ‘economy’
Worried? You should be.
Worried about the economy or think its all a lot of hot air? A couple of months ago I would have said that we were in danger of talking ourselves into a recession, now I think its clear that we are in for one whether we like it or not:
- Manufacturing output fell for the sixth successive month in August, shrinking by 0.4 per cent, marking the longest run of falling UK manufacturing output since 1980. (source: The Times)
- UK advertising spend on traditional media will slump 5.8% this year, a major slide from the previous 2.4% drop predicted in June, ZenithOptimedia said today (source: Media Guardian)
- On the upside, if you work in Digital, Internet advertising expenditure grew 21% year on year in the first half of 2008 to £1.7bn as the total ad market fell by 0.7%, according to the Internet Advertising Bureau (source: BrandRepublic)
Basically what I’m saying is batten down the hatches, its here.
We are going to have to make client’s smaller budgets work a lot harder and unless we get our acts together in terms of evaluation, we will see clients shifting their budgets into digital – the only media outside DM that can actually demonstrate ROI. My agency mates across the country in online media tell me they’ve got more work than they know what to do with.
The real issue is simple – consumers and businesses are going to have less money to spend. So our clients will be willing to spend less in wooing them. To top it all, at the most basic level if the government is getting less taxes from business and individuals, it has less for the DoH, DCMS, MoD, UKTI and the like to spend with us.
Since the average agency bod is my experience lives financially pretty much month to month (as an industry we’re not exactly famous for our love of cautious saving and living within our means), some people are going to get hit very hard very quickly if they get made redundant.
What can you do? I’ve not got all the answers but I suppose for starters you could develop a sudden interest in your agency’s steady-away B2B client that has weathered every financial storm since 1897. Or you could decide that online media planning is what you really always wanted to do.
But more realistically its going to be about advising clients on the best way to spend what budget they have – and making sure they spend it with you.
I think Planners are going to have to start demonstrating their own effectiveness outside of the IPA paper as well. I’ve always said that without Planners effective ads would still get made, its just that they would be less insightful and therefore effective – but they’d still work. Indeed many agencies manage perfectly well without Planners at all. So maybe we need to start calculating the value of the articles we write, the conferences we speak at, the away-days we attend and so on. After all (to steal from the seemingly recession proof Tesco), every little helps.
The Downwave Revisited
I found an old copy of ‘Into the Upwave’ by Robert Beckman at home (loving the author pic). It was published in 1988 but some of it is so relevant right now that they might as well save money on economists and read the first few chapters out loud on the Ten O’Clock News every night.
The gist of the first part of the book seems to be that everything is cyclical and looking at economic events over recent centuries it is possible to predict where we are in an economic long wave model. So ours would have several minor recessions over a 25-30 year ‘upwave’ period (1980/81 and 90/91 in the UK I’m guessing), followed by a period of sustained growth and then prices and/or inflation peak, leading to recession (now-ish). This recession is longer and steeper than anything that took place during the ‘upwave’, lasting 8-10 years.
The only thing is, what if the timeframe is longer and our relatively recent minor recessions were really the cumulative downwave to the post war upwave and therefore we are seeing the beginning of a period of full on depression as per the right hand side of the graph?
Update 27/01/2012 – a kind friend has just sent me a copy of The Downwave (I only had Into The Upwave before):
The copy on the back cover is spookily familiar:
