Renewed scepticism about Sir Martin Sorrell’s quadrennial effect…

Raymond Snoddy says anything that increases confidence and the propensity to spend in the depths of a recession has to be a good thing, even if the intellectual pillars on which it stands are decidedly shaky…

Sometimes you just fall out of love with a theory. You can’t always put your finger on the precise moment but you know that things aren’t what they used to be and indeed are supposed to be.

Maybe it was the Diamond Jubilee celebrations that have provoked renewed scepticism about Sir Martin Sorrell’s quadrennial effect.

It was the canny chief executive of WPP who, like an astronomer searching the skies, realised that something remarkable must happen in the marketing community when the transits of the US Presidential elections, the Olympics and the Euros all come together once every four years.

It may not be quite so dramatic as Venus crossing the face of the sun but then you don’t have to wait another 105 years for it to happen again.

For years we have all been setting our course and our marketing budgets using the Sorrell quadrennial, as we have come to call it. It was just a given. In the quadrennial marketing expenditure gets a boost. It amounts to a law of nature.

But where exactly is that effect now when we most need it – and when we have not only the US elections, the Olympics and the Euros but the additional help from the Diamond Jubilee with its buns, burgers and balloons and Venus to boost telescope sales?

Shouldn’t the quadrennial effect be particularly powerful this time round? And if it cannot be discerned with the naked eye at the moment isn’t it time to pension off the Sorrel effect, if not actually Sir Martin himself?

The facts are quite stark. In June ITV, presumably relying on Sir Martin’s nostrum, was forecasting a 17% rise in advertising revenue year on year. Now some analysts are forecasting a serious slump as soon as June is over, with July down by as much as 10% and a fall of between 3% and 5% in August.

Others are a little less pessimistic but there is still enough inconsistency there to go back to first principles and ask whether the battered reputation of the quadrennial effect will ever recover.

We must be fair to Sir Martin. He is the ultimate global marketing warrior and is only interested in the big world picture. The WPP boss never claimed there would necessarily be a boost to marketing budgets in East Sheen every four years, or that QPR staying in the Premiership would have a greater effect on the bars of the Goldhawk Road than the US Presidential elections. After all ITV is unlikely to benefit from too many Obama ads this autumn.

We must also accept that Sir Martin makes only modest claims for his discovery – a mere 1% boost to growth for the marketing industry.

The trouble with such a relatively weak forecast is that it could be completely deluged by recessionary pressures. Will we really ever know whether marketing budgets would have been 1% lower than they would otherwise have been without the Sorrell effect?

Apart from not having political advertising on British television there are the usual British exceptions to the theory – the BBC.

The BBC shows the Olympics and ITV will probably cobble together its worst ever schedule on the grounds that hardly anyone will be watching – a very strange sort of quadrennial effect. The commercial broadcaster should, however, benefit to some extent from commercial tie-ins of Olympic sponsors such as McDonalds.

Even for the later stages of the Euros – if there are later stages of the Euros – when the BBC and ITV go head-to-head the Beeb traditionally wins.

This could start to change once people begin to digest the fact that casual viewers of the BBC’s Jubilee coverage may have been left with the impression that Admiral Nelson was wearing a funny hat at the Battle of Waterloo.

Timing is also a problem when it comes to actually measuring ‘the effect’.

With the possible exception of beer and take-away pizza ads at times of football tournaments most of the advertising is actually down months in advance. Few companies want to advertise at Christmas when the presents have already been bought and wrapped.

Yet the best explanation for what is happening to the quadrennial effect is that it is now entirely out of Sir Martin’s hands and any trace of quadrennial activity has been snuffed out by the austerity budgets of David Cameron, George Osborne and counterparts across Europe and the Eurozone.

Demand in the economy is reduced in a downward spiral leading to falling confidence. Indeed Sir Martin is not just a one theory thinker and has started to frame another theory, which might help explain why his original apercus has apparently lost some of its robustness.

“In fast-growing economies they are investing in capacity and brands. In slow-growing economies they are investing in brands, so there is a double whammy,” said the great man earlier this year. Ah the Double Whammy theory. Teams of economists are already at work trying to de-construct that one.

Until the work is complete perhaps we ought to give the quadrennial effect the benefit of the doubt for the time being. Anything, as Keynes might have said, that increases confidence and the propensity to spend in the depths of a recession has to be a good thing even if the intellectual pillars on which it stands are decidedly shaky.

Meanwhile, as Sir Martin restlessly tours the globe perhaps he could apply his fertile mind in a few quiet moments to coming up with an annual effect. Four years is simply too long to wait for another quadrennial. And anyway who said the Olympics could only happen once every four years?