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Wednesday, April 08, 2009

Where goeth advertising spend?

The latest Bellwether report from the Institute of Practitioners in Advertising (IPA) - published 6th April - has found that the rate of decline of marketing spend slowed in Q1 (i.e. it is still declining but not as fast as it was).

The IPA President says: “This data supports the view that the bottom of the market has been reached. It will be a long road to full recovery, but this maybe the turning point. It’s good to see a graph going in the right direction for a change.”

When a budget cut, that is the second steepest decline in the survey’s nine-year history, is seen as positive news then you really are grasping at straws.

Maurice Levy, the chairman and chief executive of Publicis Groupe, isn’t so positive in his views about the future. He believes the global advertising market is weakening faster than previously feared. In his words: "The advertising market is locked into a downward spiral” he goes on to say: "Since the beginning of the year, the indicators haven't stopped getting worse. In February, I was expecting a global decline of the order of 3 per cent. It is now accepted that the drop will be even stronger."

I think the Advertising Industry would be wise to keep expecting ‘disaster’ and then be delighted if it is only ‘dreadful’.

The problem is that it is not only about companies reducing their advertising spend to reduce costs. I suspect that companies are realising that consumers aren’t likely to be too impressed by companies that are seen to be splurging out on advertising at a time when they are worrying if they will have a job tomorrow. Dick Stroud

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