Just as hemlines in women's fashion rise and fall with the stock market, the mood at Media 360 is a reliable barometer of the state of the industry.
So after a year that defeated even established companies such as i-Level, the atmosphere at Manchester's Lowry Hotel was sober; the 180 delegates came to learn how they can recover and move on from the deadly slump.
As conference chair David Pattison, PHD founder and former chief executive of i-Level's parent company ILG Digital noted, even senior clients were unafraid to ask for help with rebuilding trust in their brands in the "new age of anxiety", where 41% of the public believe they will have to work beyond retirement.
Kevin Brennan, UK marketing director for Kelloggs, said: "Everything I ever knew about marketing brands is wrong. The digital revolution - which has brought us search, online shopping and video on-demand - is as profound as the advent of television, the most powerful medium ever invented.
"We are facing challenges we haven't seen since the 1960s; we need help with the strategy and thinking end of our brands."
The hangover from the recession cast its shadow over the conference, which took place weeks before the Government announces its Emergency Budget to tackle the country's £156bn deficit. When money is tight, every corner of the industry comes under scrutiny. Have consumers lost their loyalty to brands? Can media owners make money when their business models have changed beyond all recognition? Do clients even need media agencies any more?
Against this backdrop, the structural change in the industry and changing patterns of media consumption show no sign of slowing.
Consolidation in the radio, outdoor and TV markets - stoked this week by Rupert Murdoch's bid to own BSkyB outright - has given media owners the power to "play the volume game back to us", in the words of OMD UK's managing director Jonathan Allan. And Peter Sells from BBH predicted mobile will be the primary channel for global internet consumption by 2012, with 50bn apps downloaded.
Confusingly - given the phenomenal growth of digital media - traditional channels still deliver for brands. The election was swung by TV, despite the early chatter about YouTube and online mashups, while the political drama shifted one million more copies of the Times, the Telegraph and the Guardian combined.
Take into account agencies' fight to retain business at any cost - the race to the bottom that has squeezed margins to almost zero - and it is no surprise there is "despair and unhappiness" as the industry struggles to find a way out of the mess. "The comms triangle between idea, consumer and brand has gone wrong," said Justin Gibbons, partner at Work Research. "Integration feels like the Tower of Babel; PR firms can be the lead agency, which is ludicrous."
The "general mistrust between all parties" has created a media landscape that is more disintermediated than ever, according to Brennan from Kelloggs, who explored the potential for a "second golden age of agencies".
Crediting Ogilvy's Rory Sutherland for the aphorism, he said: "When a client is trying to choose a media agency it feels like walking into a restaurant to be confronted by five different waiters brandishing five different menus."
He added: "There is a lack of integration, a lack of investment in talent and a lack of focus on strategy, ideas and execution. In the second golden age, the agencies that win will be integrated agencies that invest in knowledge."
Pointing to the fact that Special K is "cheated on 80% of the time", Brennan also challenged the idea that consumers buy products based on rational decisions. In fact, he said, humans' brains are wired to be more emotional and people make decisions impulsively and subconsciously - "rational, loyal man" is no more.
Based on these new norms, planners must reduce shoppers' price sensitivity by appealing to their emotions, as Les Binet, European Director of DDB Matrix, outlined in his Survival Guide. For example, insurance firm More Th>n made the brand "human" by sending one of the firm's loss-adjustors to live among its customers for three months and using the footage in its ads.
Media agencies must also stop focusing on the "big idea", said Gibbons from Work Research. Instead, they can "make sense of emotional man" by embracing the opportunity to become custodians of consumer insight. Media plans must become more disorganised to reflect the way consumers absorb ad campaigns intuitively, using "many executions and lots of creativity" to bring the brands to life.
Gibbons said: "The Tories had two different ad agencies; the tyranny of matching luggage is misguided. As we become more liberated, we can think about the punter and they are very forgiving for brands - they see things selectively, in an atomic way. If you could measure that energy, that is the definition of integration."
The future of agencies
One consequence of the recession is the trend for media owners to bypass agencies and go direct to clients, amid accusations the relentless pitching process has shrunk agencies' margins and made media planning less channel-neutral.
Martin Heaton-Cooper, vice-president commercial development at Discovery Networks UK, who negotiated a sponsorship deal direct with the Royal British Legion, commented: "You often find that when the due date approaches, either there are so many big egos you cannot reach a consensus, or there is absolute silence." However, he added: "Media is complicated and moves fast - so clients going direct should be warned media is a time-consuming affair."
Defending the agencies' corner, Allan from OMD admitted it is media agencies' fault the market has become commoditised over the past year, and that "unless [agencies] add value to clients and media owners, we have no future".
Allan said OMD has declined to pitch or has lost pitches over the past year because it "refused to go below the bottom", adding that this price-driven way of doing business will "come back to bite the industry on its arse".
OMD has invested heavily in search and social media, and Allan believes media agencies are best-placed to take a more consultative approach. "We are moving to a broader arena; we are now positioning ourselves as a marketing services agency," he said. "What can be mistaken for a lack of innovation is the fact we will only invest in something if it has the right commercial basis; we thought interactive TV was the Holy Grail, for example - it wasn't."
He added: "We go into things at the right time and we should shout more about what we do, as we have the ability to make sense of it all for our clients."
The Government has also been preparing for the new world - one where the COI's advertising and marketing budgets are expected to be cut by 50% for 2010/11, as part of the Treasury's plans to save £6.2bn. "This may be the year of mobile, but it may not be the year of government communications," joked the COI's chief executive Mark Lund, who outlined how the government plans to "make the most of less" by democratising communications.
Sprit of collaboration
When the COI plans its budgets in future, Lund envisages far more collaboration between the Government, media owners, brand owners and media agencies, with advertising activity subject to a set of rigorous tests of effectiveness and value. Lund believes the challenge is an opportunity for the media industry to perform better and to up its game - as scientist Ernest Rutherford, who split the atom, said: "When we have no money we have to think."
"Necessity will have to be the mother of our invention," he said. "And that is not necessarily a bad place to be." In practice, this will involve rethinking the channel mix between paid, owned and earned - creating partnerships with media agencies, brands and civic groups - and promoting conversations by using cheaper forms of communication such as social media, which Lund described as "the modern version of the printing press".
The COI is also evolving the way it works with agencies, under an ongoing review of its creative and planning rosters - "we are still too hidebound in old divisions" - and has launched a consultation to create a payment-by-results system.
Lund finished his presentation with a quote from archbishop Desmond Tutu, who said: "The rise in equalities is the most exciting thing in the world today" - the new media world is about "sharing and talking" rather than controlling.
Even the creative agencies agreed. Recalling the iconic white-on-red campaign for the Economist, which was "a fusion of creative and media", Dave Trott, creative director of CST, said: "Campaigns go viral because good people want to talk to good people. You have to engineer ways of making people talk."
When the media industry finally emerges from its painful period of transition, a new communications industry will rise from the ashes - one that returns to combining creative, strategy and planning to deliver fully integrated campaigns.
Pattison said: "It struck me we have a very diverse industry, but many of its members still want to put it in boxes. Clients must pay good money for great media solutions, but those solutions must be more bespoke. That was what everyone was asking for at Media 360, even if they didn't realise it."