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"Many of them still see marketing as discretionary spending - rather than as the investment they need to drive performance."The big question is whether the fall in ad spending is a blip or a sign that the industry is heading back to full recession.Several advertising sales managers last week all said the same. None of them wants to fuel negative expectations - but none can rule out a recession.One of the more optimistic said: "We came through a very difficult time [after 2000] into a marketplace last year which was very good. But over the last month it has been a lot more difficult than we expected."Another explained: "The trouble seemed to come around April. The popular newspapers did rather brilliantly last year, certainly in comparison with a poor year before, largely fuelled by retail advertising But that money is not there any more. It is causing suffering."So what has caused the problems? Several factors are identified: first, the general election. During the three weeks of any election campaign, one of the biggest buyers of newspaper ad space, the Central Office of Information (COI), the Government's advertising arm, withdraws from the market. This is to avoid allegations that the Government might be using taxpayers' money to swing votes.
(Perish the thought that the COI should be used to buy political support at any other time.) At the same time, the theory goes, other advertisers feel uncertain at the prospect of a new government and also hold back spending.This should be a temporary glitch. But the tap, turned off in April, does not appear to have been turned back on And no one knows why. Interest rate rises or tax increases? House price fears? Or have we collectively spent too much on our credit cards?More worrying still, some big spenders have left the market entirely. Remember those ads for a sofa firm in which Bruce Forsyth dressed up as a judge and promised to "see you all in Courts?" No longer Courts went bust at the end of last year. Nor will you be seeing adverts for Rover cars, Allders department store or Coldseal windows."Just Rover alone, you could be talking £30m or £40m that has gone forever," said one newspaper executive. Other spenders are regrouping: "Financial advertising, which tends to be direct response, is not getting results at the moment," admitted one industry voice. "And recruitment advertising is awful."For all this gloom, no one is panicking - yet.
Steve Goodman, group press director at advertising buyer Mediacom, said that the past few months' jitters can be put down to an unfortunate coincidence of factors. "But now that the election is out of the way, we can perhaps head into a new era and hopefully things will pick up."Paul Richards, media analyst at Numis Securities added: "I wouldn't see us heading into another major recession like we had in the early 80s, early 90s or 2000. And while he's Essex - late thirties plumber or cab-driver - he's not too Essexy, because that would distract the viewer from the essential simplicity of the message. I think there's something we can all learn from this.Peter sru.co.uk.
