The most recent Bellwether Report may spell gloom and doom for some, but it also presents a number of opportunities.
At face value, the outlook for the advertising industry, according to the report, is at best cautious and at worst calamitous. Many clients are adopting a wait-and-see policy, either by cutting their budgets or holding off committing money until it is clearer how their business is performing and in what direction the economy will go during 2002.
Yet, scratching below the surface shows that the overall picture isn’t as bleak as it at first appears. For a start, commitment to direct marketing continues to grow as clients remain prepared to invest their money where it is most directly accountable. Additionally, there have been encouraging signs in January, with some significant activity from the travel and leisure sectors – sectors that have seen a marked decline since September 11.
From this perspective it can be seen there are opportunities to exploit and it is up to the advertising and media industries to impart them to clients.
First, it should come as no surprise that direct marketing is seeing continued growth. When times are tough or uncertain, it is easier to stick to the things that work and are accountable, where a return on investment can be measured and delivered.
Clients will maintain or even increase their marketing spend if they can be reasonably certain that it will help to deliver their business objectives. This means that any communication channel that presents itself as accountable, flexible and tactical is likely to see growth in market share. This is not exclusively the domain of direct channels – the challenge for the industry is to continue building some of these attributes into more traditional above-the-line media channels.
Second, the fact that clients are taking an increasingly short-term view of their media needs will impact on the dynamics of trading. As costs fall, clients that have maintained their budgets can get what they want for less, so they can use other media channels or keep the money.
Additionally, there is greater emphasis on the short-term market. This is largely uncharted water for the majority of the industry and has been dominated mostly by direct advertisers that are structured to work in this way. The move to short term produces challenges for buyers and sellers alike, as they need to adapt. TV is more likely to feel the brunt of this change in emphasis, as it is used to a longer approval process for producing ads for TV.
The major challenge is to harness the changes in the market to encourage lapsed, stalled, or new advertisers to take advantage of the value around at the moment. There are real opportunities for us to help our clients meet their business objectives.
The opportunities are many. But, to exploit interest and confidence to their maximum, the industry must show that media is accountable and can deliver a positive return on investment.
Jeff Hyams is managing director of Zed, the integrated media planning and buying agency