In an industry which is often called upon by its clients to communicate the promise of a better tomorrow, the business and political environment we face today is an extremely challenging one. To the business effect of recent events on our own companies, our clients and, in turn, their clients, one must add the personal toll to those directly affected and the effect on those less directly involved, who nevertheless strive to comprehend and adjust to what has happened over the past month.
As an agency founded in New York but now operating globally, taking in and reaching out to a vast patchwork of cultures, we have in recent weeks felt a heightened sense of community. Conscious of our role as intermediary between buyer and seller, talker and listener, we go about our business with a heightened sensitivity. In this we are not unique: we are merely bound to describe the situation as perceived from our own professional and personal standpoint.
The ultimate effect of the terrorist attacks – and the response to those attacks – on the advertising and marketing community remains to be seen, but there are clear business implications. Predictions of economic growth are likely to be revised further downward over the coming months. A continued slowing in clients’ businesses will have obvious effects on their marketing expenditures, though to what degree no one can yet be sure. As Ignazio Visco, chief economist of the Organisation for Economic Co-operation and Development, said on October 1: “The indirect impact [of the attacks] is difficult to assess because there are no close historical precedents with which parallels can be drawn.”
One must bear in mind that while economic growth is generally a precondition for increased expenditure on advertising and communications, it is not the only factor. So much depends on the confidence of advertisers, how they perceive market conditions to be and how willing – and able – they are to invest.
Levels of ad expenditure, as Robert Coen of Universal Media pointed out in a recent interview, tend to be regarded as a “lagging” rather than a “leading” indicator of such confidence and ability. Yet there is a sense in which advertising can and must take a lead. In expressing this sentiment, I echo others within the industry, such as International Advertising Association director-general Wally O’Brien0s, who has put forward a similar argument.
While it may be a “lagging” indicator in terms of reported expenditure levels, advertising is a “leading” component of economic growth and a contributor to consumer confidence. By nature and by profession we are constructive and forward-looking. What we must do now is no different, in essence, from what we always strive to achieve: to continue to seek competitive advantage for our clients within the context of their stated aims, the means at our disposal and the characteristics and constraints of the market. Yes, this may become appreciably harder to achieve in the immediate future, but it is the only way forward.
John Shannon is president of Grey International