Pinning Hope on World Cup for Recovery in Advertising; MEDIA ANALYSIS

The Evening Standard (London, England), January 6, 2010 | Go to article overview

Pinning Hope on World Cup for Recovery in Advertising; MEDIA ANALYSIS


Byline: Roy Greenslade

A NEW YEAR always offers the possibility of new hope. Surely, after the worst 12 months for the media in modern history, things can only get better in 2010. The recession will recede. Confidence will return. Advertising will pick up.

If only that were to be the case. Most forecasts suggest otherwise and, in taking counsel from some of the wisest of advertising gurus, there appears to be little chance of a concerted upswing.

There may be some light filtering through, but before we reach it, we must travel down a gloomy tunnel. Predictions are not facts, of course. But there is more than a measure of unanimity among forecasters. Taken together, they look very pessimistic indeed.

GroupM, for example, predicts that there will be zero growth in ad spend this year over last. Its ultimate boss, WPP's Sir Martin Sorrell, tells me that this represents somewhat of a turnaround in fortunes.

"Flat is the new up," he says grimly. "Advertising is likely to do better than last year, but that isn't saying much. It's a 'less worse' scenario."

GroupM's futures director, Adam Smith, recently suggested that there was anecdotal evidence of improving confidence, which might just revive marketing investment, but then qualified this by adding: "It cannot make any easier the fiscal and household consolidation which lies ahead... We still have most media types negative on revenue in 2010."

Figures produced by Enders Analysis are even more negative. Its forecast for this year suggests that the overall press ad spend will fall by 8.4% compared to 2009 while television drops by 4%. Like GroupM, it does believe there will be an improvement in internet spending, but this will not offset the general decline.

Both Sorrell and Claire Enders, who runs consultancy Enders Analysis, point to looming problems that the British economy faces after the election.

For example, the removal of fiscal stimuli, such as quantitative easing and the car scrappage scheme, are very likely to have a negative impact. On car scrappage, Sorrell points to the US precedent: "When 'cash for clunkers' was withdrawn, the American auto market shrank from 14 million units to 10 million."

He and Enders agree that the Government will do nothing this side of the election about the underlying and grave problem of debt.

After the poll, whoever gets elected, the incoming government will have to face up to the reality. "Uncertainty over the UK's indebtedness is so great," says Enders. "Even if things feel relatively buoyant now, economic realities at the back part of the year could be hard to deal with. We'll be living minute by minute."

The greatest fear would be of a double-dip recession, which, not surprisingly, would have a further disastrous effect on advertising. Enders's colleague, Douglas McCabe, agrees. "It's going to be pretty tricky," he says. But he believes, whatever the outcome of the election, that there is likely to be a further decline in spending on TV and newspaper advertising.

Sorrell, as head of one the world's largest advertising companies, is able to see matters in a global perspective. …

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