Opinion
Marketing
Broadcaster focus
budget cuts
have hit the ad
industry hard
but there are
small signs of
change of late,
Tough times for adland
says Pippa
Considine
When times are hard, marketing budgets are some of the first to be
slashed and the advertising industry has taken a painful hit, some believe
the worst in its history. Marketing budgets have tumbled, with many big
advertisers, such as Orange and Marks & Spencer, spending around 20%
less in 2008/9. Advertising agencies have had to lose staff and make pay
cuts, with estimates that the UK ad industry may have shrunk by one
quarter by the end of the year. Commercials production companies and
post houses have seen less work, tighter budgets and smaller margins. PIPPA CONSIDINE
That said, things seem to have got a fraction happier as 2009 draws to Industry journalist
a close. Ad industry guru, WPP’s Sir Martin Sorrell, reckons the second A former account
half of this year will look better, but is not forecasting signs of a recovery exec at a London
before mid 2010. In July, The Institute of Practitioners in Advertising’s advertising agency,
quarterly Bellwether report would only go so far as to say that marketing Pippa began her
budgets were being cut at a slower rate. career in journalism
So what does this all mean for the wheels of creativity? Are ads still at Televisual. She
being made? Is there sufficient work to go round? now writes regularly
The inactivity of late 2008 and early 2009 has been replaced by clients for Campaign
on the move, making decisions based on hard realities. And, so far, there magazine, The Times
have been no companies lost off the radar of industry trade body the and Marketing Week
Advertising Producers Association.
There are still enough good adverts being made to give an impressive
show at the major awards. October’s Campaign Big Awards makes the
case that clients are looking for creative work that helps their brands thrive
through the global recession. And it’s true that at this year’s Cannes Lions
International Advertising Festival, UK agencies scooped a grand prix and
a clutch of golds. Production company Stink Digital picked up a grand
prix for its Carousel interactive ad for Philips (pictured) and three of the
Cannes’ ranking of the world’s top ten production companies are based
in London.
But this success is in the teeth of downward spiralling advertiser spend.
Throughout the advertising food chain people are being asked to pare
budgets to the bone. Production companies are already working on a
highly efficient business model; top production company Rattling Stick is
a case in point – it’s a tiny collective, with a flexible cost base. There’s not
much fat to cut and savings have, in part, to be passed down the line,
making do with fewer crew at lower rates.
A rash of blockbuster movies, such as Nottingham, Gulliver’s Travels and
the two Harry Potter films are giving post houses a bit of help. But, as always,
they are under pressure to acquire the next big bit of new kit and the hole
in commercials revenue is being keenly felt.
Next month will see the next Bellwether report gauging the health of the
advertising industry. Agencies, production companies and post production
houses alike will all be watching carefully for hints of a brighter future. in my view
Autumn 2009 theproducer 7
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