Ad Recession: Probably over. Pricecutters beware…

ZenithOptimedia is predicting global ad markets will increase 0.9% in 2010 to almost $448bn (£274bn) and expects ad expenditure to show steady improvement over the next three years, with growth of nearly 5% by 2012. The global spending prediction is the Publicis agency’s first upward revision in 18 months and comes after the worst ad decline in modern times. Zenith also predicts ad spend to fall 10.2% in 2009 to nearly $444bn.
US online advertising spending is set to drop this year for the first time since 2002. eMarketer estimates online ad spending will be down 4.6% this year. However, the slowly recovering economy, combined with basic structural changes in how marketers and the public use media, will lead to Internet ad spending growth in early 2010.
“It’s been denied, but I would rebut the denial,” Sorrell said, calling the practice “extremely dangerous in my view. It’s particularly dangerous if we see media price inflation.”
Possibly related:
Zenith Forecast: In ’09, Only Online Grows
(paidcontent.org)
Reblog this post [with Zemanta]

Agencies: Traditional agencies too resistant to digital … Digital agencies not ready to lead … UK shops losing their touch …

Agency bosses too old and change resistant, claims Sorrell
WPP chief executive Sir Martin Sorrell (aged 64) claims that brands are not spending enough online because the people who run their agencies are too old and resistant to change. Delivering the opening keynote session at ad:tech New York, Sorrell criticised brands for investing an average of just 13 per cent of their marketing budget online despite the rapid increase in digital media consumption.

sir martin sorrell

Why Digital Agencies Aren’t Ready to Lead
Ana Andjelic opines: “Any conversation about digital marketing these days includes at least one mention that traditional agencies just “don’t get it.” While this may be correct, it’s equally true that digital agencies are not ready to take the lead. Look at the typical digital agency. It excels in exploring new horizons. It supports a flat and loose organizational structure in which a developer has access to the CEO. And it makes sure everyone’s opinion is heard. It’s one big crazy family. Digital agencies are having fun experimenting with ideas, technologies and strategies to find new alternatives superior to obsolete ways of doing marketing. That’s what they do best. The problem is, this is the only thing they are doing. When they are asked to actually follow through on their ideas, they often come up short. It is because they don’t know the business of marketing (or want to know it, for that matter), and they rarely have the organizational structure or past practices to guide them.”

akqa san francisco

The London ad scene, which has long produced groundbreaking TV commercials that are the envy of New York creatives, is suffering through an identity crisis. Slowness in adapting to the digital reality is causing some intense navel-gazing, with many concluding that U.K. agencies and marketers have to get up to speed — and fast. David Droga grew up in Australia admiring British advertising as the best in the world, and at age 29 was made executive creative director of Saatchi & Saatchi London. Mr. Droga has since moved on — he left London for New York in 2003 — but he claims that U.K. creativity is still pretty much back where he left it nearly seven years ago. “There is no question that TV, press and outdoor are still the primary focus in the U.K.,” Mr. Droga said. “There is less integration there, and a tendency to default to the safety of TV and posters.” I might point out to Dave that this is probably true of the big shops in the US …

Possibly related

Sir Martin Sorrell: Rupert Murdoch’s pay wall plan is right (telegraph.co.uk)

Profits halved at advertising firm WPP (guardian.co.uk)

Does Sir Martin have another motive for peddling his alphabet soup? (telegraph.co.uk)

WPP profits down by nearly 50% (guardian.co.uk)

WPP sees little evidence of ‘stouter hearts’ needed to spend during downturn (telegraph.co.uk)

Reblog this post [with Zemanta]

Sir Martin: Tough Times, Goin’ Digital

Economists may think the worst is behind us in this recession, but media people continue to be less optimistic. Earlier this week, Media Life published results of a reader poll finding that most respondents believe that recovery in the media economy won’t begin until second quarter 2010 or later. Yesterday the head of the world’s biggest advertising group, Sir Martin Sorrell, seemed to agree that recovery is still a ways off. Discussing WPP’s first-half results, which saw profits fall by nearly half, Sorrell told reporters that despite some big-ticket events in 2010, including the World Cup and Winter Olympics, he felt “cautious” about the possibility of recovery. Sorrell said that the shape of the recovery will be “an L shape, and an italicized L,” according to the Times of London.
martin-sorrell
In a first half earnings statement released this morning, WPP Group announced that digital and direct marketing-related services now comprise 25% of its body. WPP Group owns labels like 24/7 Real Media, Mediaedge:cia, MediaCom, Mindshare, GroupM and Outrider. Digital and direct garnered $1.7 billion in revenues in the first half of ’09, with a projected annual run rate of nearly $3.5 billion total. But it is digital media and advertising that appear to be dominating the segment. Overall, first half revenues fell 2.9% to $6.4 billion in the first half on a reported basis, MediaPost reports. Like-for-like, however, total revenues slid 8.3% against the first half of 2008. According to WPP, traditional advertising and “media investment management” have been the hardest-hit amidst the economic downturn.
Reblog this post [with Zemanta]

Alcohol: Southern Comfort Goes Digital, Sherry Goes Social

Brown-Forman‘s Southern Comfort brand — weary of jostling for notice with other spirits brands during the narrow nightly window when they are permitted to advertise on cable — is taking its entire media buy digital, allowing it access to programs online it couldn’t touch on TV.

southerncomfort

Ad Agency Creature Marketing Sherry to Younger Consumers
Seattle boutique shop Creature has developed a humorous Web site that’s meant to shed some light on the drink’s history, types and usage. The site, built for the Sherry Council of America, takes on the fusty image of the Spanish fortified wine.

secret sherry society

Reblog this post [with Zemanta]

Print Deathwatch: Magazines, Newspapers

Its farewell to magazines that quit print under pressure from recession and digital media. Some brands continue online, but many do not.
deadmags1

eMarketer Sounds Death Knell for Newspapers
US newspaper ad revenues are expected to drop 42.5% in the next seven years, signaling a death spiral for the medium as readership moves online and to more real-time, interactive venues, according to a report from eMarketer. In its report, “Newspapers in Crisis: Migrating Online,” the research firm estimates that newspaper advertising revenues dropped 16.4% to $37.9 billion in 2008 and expects that by 2012, those revenues will tumble to $28.4 billion – slightly more than one-half the industry’s revenue peak of $49.4 billion in 2005.

national_newspapers_montage

Reblog this post [with Zemanta]