A Time For Confidence And Consideration
Kevin Murphy, joint managing director, Zed Media, discusses how the deepening financial crisis could affect both businesses and individuals in the media industry…
I was recently at a networking event, which as always provided fascinating insights as to the state of the wider media industry. Usually people begin conversations in a more guarded and PR friendly way; how well their businesses are going, how happy all their people are and how wonderful their clients are. However, as the evening draws on and the amber nectar loosens tongues, a different and more believable picture begins to be drawn.
It’s no startling insight to say that some businesses are bracing themselves, if they are not feeling the pinch already, for a seemingly inevitable recession. Retail clients are usually the first to cut budgets and financial clients are often not far behind. Despite well founded concerns around the current financial climate we all know the economy works in cycles and from a marketing perspective there is experience and knowledge to draw upon from previous recessions this time around. One key insight from past experience is that, as the saying goes, “attack is the best form of defence”. In many cases clients who maintained or especially increased their advertising budgets saw that it helped them to make significant gains in market share in the long term. Marketing activity during a period of cheaper media and less competitor noise can pay dividends when the recession ends.
I would suggest the reason some companies withdraw budget is often to do with confidence in marketing. Can a marketing director get the board’s support to increase budget, particularly if they are not marketing literate and see advertising as a cost rather than an investment? Will the stakeholders see this economic downturn as an opportunity or a threat? It’s also a question of setting the correct timeframe for results to mature. Many, if not all, businesses have year by year targets. Increasing advertising spend in a recession may have an adverse impact on ROI in the first year compared to a tactic of cost cutting and slashing marketing budgets, but the payback comes when the economy picks up again, which it inevitably will do. It’s a tough choice, but they say fortune favours the brave.
When the alcohol fuelled debate turned to people, passions became higher. The media industry contains a huge majority of people who have never worked during a recession. The last official recession was back in the early nineties and the nearest equivalent in advertising terms was the dotcom crash at the turn of the century. Up until now many people – particularly in digital where technical skills, even without client handling and people skills to go with it – seemed to be on a perpetual fast track of salary rises and pursuing head hunters. These people were in demand and in an economy on the up and in digital channels that were just exploding into life, this was all they knew of the media industry and they must have thought it was a doddle. However the digital media industry is maturing apace and the talent pool is getting deeper. Add to this the very real possibility that job offers will diminish because of financial pressures and we will witness the first real test of most media people’s mettle and attitude (in digital and beyond). Maybe the economic climate will force some people to have confidence in their current employers, and have the consideration to stay and develop their all-round skills and prove their value for money. Furthermore, will they show commitment and loyalty and help the companies who have given them great opportunities and rewards up until now?
As the night drew to a close and the drink starting talking, there was a beautiful inevitability that client talk would become far more interesting. There was a consensus that clients not only need to maintain confidence in their marketing strategies, but wouldn’t it be wonderful if we could all be considerate to each other’s business needs? We will clearly fight tooth and nail for our clients at this time but in true Jerry Maguire style they can also certainly help us to help them.
One conversation which caught my ear was resource allocation. When people talked about poor briefings causing excessive agency work, there seemed to be universal agreement. It seems that the brief, if one comes through at all, is too often being used as a ‘first thought’ or simply a loose idea that gets refined through draft after draft of agency recommendations. When remuneration is calculated it is usually based on a workflow model of client brief – agency response – discuss then amend if necessary – book. If one sees a schedule listed as version 23 there is a disconnection between client briefing and/or agency understanding that needs to be addressed.
So I left the evening with much to reflect upon, but top of my mind was the fact that in times of potential uncertainties in so many areas, there has never been such a need for close, collaborative relationships between clients and their agencies. Trust is paramount and confidence is key. We must show a consideration for each other’s business needs and pressures and create a shared belief that working together as a team is the best chance of being successful, regardless of any challenges that lie in wait.
Zed Media: www.zedmedia.co.uk